Demand for motor vehicles indicates how many motor vehicles at dissimilar prices consumers are keen to buy at a specific period of time; effective demand is when a consumer is both willing and able to purchase a motor vehicle, and supply refers to the amount of motor vehicles a…
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if consumer’s income is reduced then demand for motor vehicles, especially higher priced vehicles, is reduced; as a result the price and supply of vehicles drop. Incidents such as strikes or a rise in the cost of steel incur extra production costs for manufacturers; a rise in output costs means a fall in supply at a higher cost for the vehicles. On the other hand, if production costs are decreased and therefore motor vehicles are cheaper to produce then an increase in supply will occur with a reduction in price.
Supply and demand can be illustrated as curves on a graph and where the two curves merge is the equilibrium price and number; the equilibrium sets the benchmark towards which the market moves and if demand and supply swing then the equilibrium correspondingly changes.
An increase in petrol prices is an additional drain on consumer’s incomes particularly those who receive low or middle incomes, thus higher petrol prices will affect demand for vehicles in that consumers will not be able to maintain them by way of affording petrol. Demand will therefore drop and the demand curve will move to the left while the curve representing supply will move to the right resulting in a lowering of the equilibrium price of the ...
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Traditionally, these subsidies were considered as popular modes of government intervention and a quick fix for protecting the local output (as verified by the infant industry argument). However, with the birth of free trade and the associated institutions such as WTO it was realized that subsidies do more harm than good in the longer run.
Price elasticity of demand is calculated by the following formula (Arnold, 2008): Formula: Price Elasticity of Demand = % Change in Quantity demanded / % Change in Price Price elasticity of demand is used by the businesses to predict the change in demand of the product due to change in price of that product.
The paper will discuss the benefits as well as challenges that are faced by the company in its pricing mechanism. The main strategy used by KFC is product line pricing. According to Kotler & Armstrong (2010), this strategy is related to setting the price steps between various products in a product line based on cost differences between the products, customer evaluations of different features and competitor’s prices.
Therefore, the new number of Mars bars sold will be 2400. This is shown in figure 1 as a shift in the demand curve from D0 to D1. Observe at this new demand curve, at the initial price, 2400 people now purchase Mars bars. As a result the demand at this price is for 2400 bars.
If the demand curve is inelastic, the change in the amount of product supplied will be smaller compared to the change in the price (Boyes and Melvin, 2012).
Diagram A represents a product with an elastic demand curve while diagram B represents a product
Why or why not? What assumptions are you making about the change in quantity demanded in your answer? What elements of a good, in this case the book, will determine whether your assumption is valid?
b. Refer to the table. If the demand curve for
nefit by selling their commodities such as chocolates to other individuals in order to raise money for the acquisition of cigarettes (Radford 1945, p. 189).
Cigarettes emerged at the currency within the camp because they were relatively standardized, durable and a size suitable
In addition, the companies can use other marketing strategies such as position and targeting. As such, the two companies can use differentiated targeting, undifferentiated targeting and concentrated targeting. Coca Cola, for instance, strives to attract its target
As a marketing manager, one must consider the concepts as it determines all the sales and the profits made within a business. The pricing strategy concept is one of the most
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