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When a buyers willingness to pay for a good is equal to the price of the good the?
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Explain the determinants as well as exceptions to law of demand?
The five ceteris paribus demand determinants are buyers' income, buyers' preferences, other prices, buyers' expectations, and number of buyers.Buyers' Income: The amount of income that buyers have available to spend on a good affects the ability to purchase a good. In general, income has a direct affect on the ability to buy a good, that is, more income means more buying. However, income can actually affect demand in two ways. For normal goods, more income means more demand. For inferior goods, however, more income means less demand.Buyers' Preferences: The satisfaction buyers obtain from a good, based on buyers' preferences, wants, needs, likes, and dislikes, affects the willingness to purchase a good. If a good provides greater satisfaction, then buyers are inclined to purchase more.Other Prices: The demand for one good is based on the prices paid for other goods purchased by buyers. A change in the price of a substitute good (or substitute-in-consumption) induces buyers to alter the mix of goods purchased. An increase in the price of a substitute motivates buyers to buy more of one good and less of the substitute good. A change in the price of a complement good (or complement-in-consumption) induces buyers to demand more or less of both goods. An increase in the price of a complement motivates buyers to buy less of one good as they buy less of the complement good.Buyers' Expectations: The decision to purchase a good today depends on expectations of future prices. Buyers seek to purchase the good at the lowest possible price. If buyers expect the price to decline in the future, they are inclined to buy less now. If they expect the price to rise in the future, they are inclined to buy more now.Number of Buyers: The number of buyers willing and able to buy a good affects the overall demand. With more buyers, there is more demand. With fewer buyers, there is less demand.
The law of demand indicates that as the price of a good increases?
Buyers
What factors may determine the quantity of a good that buyers demand?
Price of the good in question.
Demand is said to be elastic if?
buyers do not respond much to changes in the price of the good.
What factors shift the demand curve?
the price of the good, customer income,tastes, expectations,number of buyers,price of related goods.
Explain the determinants as well as exceptions to law of demand?
The five ceteris paribus demand determinants are buyers' income, buyers' preferences, other prices, buyers' expectations, and number of buyers.Buyers' Income: The amount of income that buyers have available to spend on a good affects the ability to purchase a good. In general, income has a direct affect on the ability to buy a good, that is, more income means more buying. However, income can actually affect demand in two ways. For normal goods, more income means more demand. For inferior goods, however, more income means less demand.Buyers' Preferences: The satisfaction buyers obtain from a good, based on buyers' preferences, wants, needs, likes, and dislikes, affects the willingness to purchase a good. If a good provides greater satisfaction, then buyers are inclined to purchase more.Other Prices: The demand for one good is based on the prices paid for other goods purchased by buyers. A change in the price of a substitute good (or substitute-in-consumption) induces buyers to alter the mix of goods purchased. An increase in the price of a substitute motivates buyers to buy more of one good and less of the substitute good. A change in the price of a complement good (or complement-in-consumption) induces buyers to demand more or less of both goods. An increase in the price of a complement motivates buyers to buy less of one good as they buy less of the complement good.Buyers' Expectations: The decision to purchase a good today depends on expectations of future prices. Buyers seek to purchase the good at the lowest possible price. If buyers expect the price to decline in the future, they are inclined to buy less now. If they expect the price to rise in the future, they are inclined to buy more now.Number of Buyers: The number of buyers willing and able to buy a good affects the overall demand. With more buyers, there is more demand. With fewer buyers, there is less demand.
The law of demand indicates that as the price of a good increases?
Buyers
What factors may determine the quantity of a good that buyers demand?
Price of the good in question.
Demand is said to be elastic if?
buyers do not respond much to changes in the price of the good.
What factors shift the demand curve?
the price of the good, customer income,tastes, expectations,number of buyers,price of related goods.
If a demand curve shifts rightward this means?
Quantity buyers are willing and able to purchase more of the good every price.
What does it mean when demand for good is relatively inelastic?
when demand for good is relatively inelastic The good is regarded by the consumers as a necessity. There are large buyers of the substitues for the good. Buyers spend a small percentage of their total income on the product. Consumers have had only a short time period to adjust to changes in price.
What effect do tariffs have on consumers?
A tariff raises the price of an imported good above the world price of that good by the amount of the tariff. Domestic suppliers are then able to raise the price of their good to the price of the imported good. The rise in price causes some buyers to exit the market, and by reducing the domestic quantity demanded the consumer surplus decreases, creating a deadweight loss.
How does a tax on a good affect the price paid by buyers the price received by sellers and the quantity sold?
Quantitiy is not a factor, as the buyer will pass along the increased cost due to the tax.
Why market prices are better than government determined prices?
Market prices tend to an equilibrium where buyers' demand for the good is worth less than the sellers' cost of supplying the good. Put another way, buyers are willing to pay less than the amount producers are willing to accept. Government sets its prices above or below this point. If the price is above the equilibrium buyers will demand less than producers supply. On the other hand, if price is below the equilibrium sellers will supply less than buyers demand.
Which mechanims allocate resources when the price of a good is not allowed to bring suppy and demand into equilibrium?
When the price of a good is not allowed to bring supply and demand into equilibrium, some alternative mechanism must allocate resources. If quantity supplied exceeds quantity demanded, so that there is a surplus of a good as in the case of a binding price floor, sellers may try to appeal to the personal biases of the buyers. If quantity demanded exceeds quantity supplied, so that there is a shortage of a good as in the case of a binding price ceiling, sellers can ration the good according to their personal biases, or make buyers wait in line.
Which influence on spending deals with the motivation to purchase a product?
the price of the product and the willingness of the consumer to purchase the product impact the demand of the product by the consumer. lower the price, higher will be the demand and higher is the motivation level to buy the good.
