Monday, March 4, 2013

Changes in the Demand Environment.



Increase in Demand.


Price
Quantity Demanded per Month
New Quantity Demanded per Month
$ 1001020
$ 802030
$ 603040
$ 404050
$ 205060




The graph above shows how demand can increase because of complements. This summer, bathing suits become very popular as the weather starts to get warmer. This leads to an increase in the sale of flip flops or sandals. They are normally two items that are bought together in order to increase the total satisfaction. At every price these items increase because they are necessary things to have in the summer.
















Decrease in Demand.




Price
Quantity Demanded per Month
New Quantity Demanded per Month
$ 100101
$ 80205
$ 603010
$ 404015
$ 205020



The previous graph shows a decrease in demand because of change in consumers' tastes. For instance, if the company, Apple, all of a sudden loses popularity because of too many defects or web viruses then the demand would also go down. No matter what the price it is, people wouldn't want to buy their products because they would always malfunction. 




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