Non-Price Determinants of Demand Quiz

Non-Price Determinants of Demand

• Tastes and preferences influence demand, as a desirable product increases demand at a certain price, while an unfavorable change in taste and preferences decreases demand.
• An increase in the number of consumers in the marketplace leads to an increase in demand, while a decline in the number of consumers decreases demand.
• Consumer income affects their capacity to buy a product, with an increase in income leading to an increase in demand, and a decrease in income leading to a decrease in demand.
• Prices of related goods, such as substitutes or complements, affect demand, whereas unrelated goods have little or no effect on demand.
• Changes in customer expectations, such as expecting a higher future price, may increase current demand.

Non-Price Determinants of Supply

• The price of resources affects production cost, with an increase in resource prices potentially reducing profits.
• Technological advancements reduce production costs, enabling firms to produce more units of output.
• Taxes and subsidies are considered as expenses by businesses, increasing production costs and reducing supply.
• Prices of other goods affect supply, as companies may shift production to other product lines when prices increase.
• Price expectations influence the willingness of sellers to supply a product, with expectations of a higher future price increasing supply.
• The number of sellers in the marketplace affects supply, with more sellers increasing supply and fewer sellers reducing supply.

Buying Behavior of Filipinos

• Filipinos have unique characteristics as consumers, prioritizing durable products that fit their preferences, behavior, brand loyalty, advertising, and value of money.
• Preferences are influenced by factors such as beauty, hygiene, health, and convenience.
• Brand loyalty and advertising affect purchasing decisions, with Filipinos preferring brands that meet their needs.
• Value of money is important, with Filipinos choosing affordable products.

Purchasing Power

• Purchasing power is the value of goods or services that a unit of money can buy.
• Price increases reduce the purchasing power of money, having an adverse impact on consumers' welfare.
• Inflation decreases the amount of products or services that can be purchased with a unit of money.

Test your knowledge on the non-price factors affecting demand in economics. Explore how tastes, preferences, income, expectations, and population can influence the quantity of a product consumers are willing to buy.