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2 August, 21:43

In each of the following examples, name the factor that affects demand and describe its impact on your demand for a new cell phone.

a. You hear a rumor that a new and improved model of the phone you want is coming out next year.

b. Your grandparents give you $500.

c. A cellular network announces a holiday sale on a text-messaging package that includes the purchase of a new phone.

d. A friend tells you how great his new cell phone is and suggests that you get one, too.

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Answers (1)
  1. 3 August, 01:04
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    a. Future expectations.

    b. Income.

    c. price of a related good

    d. consumer preferences.

    Explanation:

    Remember, there are several factors that affects demand, such as:

    price, advertising, income, consumer preferences etc.

    In example:

    a. The current demand will decrease because of expectations of an improved model of the preferred phone.

    b. The purchasing power to buy a more expensive was increased because the grandparents gave the individual $500.

    c. The price of data packages a complementary good decreases, leading to more demand for phones.

    d. The referral of a friend influences interest, leading to a purchase of the cell phone.
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