Podcast
Questions and Answers
What happens to the demand of a product if there is an unfavorable change in consumer's taste and preferences?
What happens to the demand of a product if there is an unfavorable change in consumer's taste and preferences?
How does an increase in the number of consumers in the marketplace affect demand?
How does an increase in the number of consumers in the marketplace affect demand?
What happens to a consumer's capacity to buy a product if their income decreases?
What happens to a consumer's capacity to buy a product if their income decreases?
How are substitute products classified?
How are substitute products classified?
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Which factor influences demand when the ceteris paribus assumption is dropped?
Which factor influences demand when the ceteris paribus assumption is dropped?
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How do complementary goods affect each other?
How do complementary goods affect each other?
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What is the relationship between Unrelated Goods in terms of their prices?
What is the relationship between Unrelated Goods in terms of their prices?
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How does an expectation of a higher future price affect current demand?
How does an expectation of a higher future price affect current demand?
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What is the impact of an increase in resource prices on production costs and profits?
What is the impact of an increase in resource prices on production costs and profits?
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How does technology advancement impact production costs?
How does technology advancement impact production costs?
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How do taxes affect supply?
How do taxes affect supply?
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How does the number of sellers in a marketplace affect supply?
How does the number of sellers in a marketplace affect supply?
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Study Notes
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.
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Description
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.
