In economics the demand is very important, as it moves the whole industry of money and products. So what is demand?
In Economics the word demand means a desire, but a desire backed up by enough money to buy a good or service. This means that a demand for a product is the quantity of people who desire and can afford to buy the product. For example the demand of ferrari is the quantity of people who not only desire the car (cuz every one wants to have a ferrari) but the quantity of people who can afford to buy it. Not many people have the money to buy a ferrari, which means that the quantity of demand of ferrari is less than the quantity of demand of a Nissan car.
Demand can be explained much better with the Demand curve.
In the demand curve, the quantity of demand of a product is shown at the X axis, while the price of the product is at the Y axis.
In the graph we can se that in A the price of a can is 80$ and the demand is 300, while B shows 60$ and 500 of demand, this means that the less price, the more demand.
In the demand curve, the straight line we can see, can shift either left or right, depending on the demand. Here comes the "ceteris parabus" and law of demand, which is as price of product falls, the quantity demanded. If the demand rises, the curve will shift to the right, and if demand decreases the curve shifts to the left.
Some factors that affect the Demand are:
-Income
-price and quality of similar products
-size of population
-change of age structure
-change in income distribution
-substitution
With reference to two different determinants of demand, explain why the demand curve for bicycles might increase.
There are detterminants of demand that has factors which have cause and effect.
But what factors causes effect on increase of demand in bicycles?
As said above, the factors that affect demand are Income, price and quality of similar products, size of population, change of age structure, change in income distribution and substitution.
I will explain with reference to the age and population, and price and quality of products.
-The age and its population is a factor. When the population of kids and children between 4-18 rises, the demand of the bicycles will rise too, kids and teenagers use bicycles as their first transport and if its population rises, then this makes the demand of bicycles increase. The more kids there are,the more demand there is hence more bicycles will be needed.
-When the bicycle company reduces its prices for the product, there is a change in demand, as people start to afford the price of the bicycles, when the prices drop, there will be an excess demand as its supply its not ready for such a change, it takes time to reach the equilibrium between supply and demand. The effect of a drop in price must have a cause, for example, in the bicycle company scientist found a new way to produce bicycles faster and the cost of bicycle luxury wheels dropped, this makes the bicycle company be more effective and have an increase of quality, making the consumers buy the product for its quality and its price, hence the demand rises.
A better way to explain is showing a graph.
as you can see in the graphs above, there is a change in demand, in which the product of bicycles changes its price by decreasing it, then it makes the demand rise, as it is cheaper.
Hello (: The post is good at explaining what demand is and how it exists in reality in terms of affordability and desire for goods, but you should have addressed the actual questions, which were 1) Distinguish between a shift of the demand curve for a product and a movement along the product's demand curve and 2) With reference to two different determinants of demand, explain why the demand curve for bicycles might increase; Include two graphs. The description you give doesn't answer either of those. You did use a graph which was useful for visualizing your example so that was good. The post could have been a lot longer if you analyzed the questions and compared shifts in the curve and movements along the existing curve. Even without analyzing the questions you could have expanded on the factors that affect demand. Lastly, some of the spelling and grammar had room for improvement.
ResponderEliminarEven though you make an good effort explaining what demand is un your own, simple words, and you gave a brilliant clear and straight forward example to back up your definition of demand; you were not able to achieve the true target of this activity which was to answer the two questions, 1) Distinguish between a shift of the demand curve for a product and a movement along the product's demand curve and 2) With reference to two different determinants of demand, explain why the demand curve for bicycles might increase; Include two graphs. Although you did manage to use a diagram to explain your writing, it was not used in the correct way. You could've expanded greatly on your description and explanations. Nevertheless you should've answered those questions, which you failed to do so, nonetheless the piece of writing you had wasn't bad at all.
ResponderEliminar