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Why do consumers sometimes take a while to respond to price changes?
Wiki User
∙ 9y ago
Consumers cannot find acceptable substitutes immediately. Most consumers nowadays do price comparisons. Even being 'forced' to accept a higher price (e.g. all prices the same on comparable products) does not automatically bring buyers because buyers hate how companies dictate our buying practices.
Wiki User
∙ 9y ago
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Demand is said to be elastic if?
buyers do not respond much to changes in the price of the good.
Why does the government sometimes set prices?
Governments sometimes set prices to protect producers and consumers from dramatic price swings.
A demand curve is an accurate tool for predicting the decisions of consumers as long as what condition exists?
haha
What is the value of the consumer price index?
The consumer price index (CPI) provides a method for calculating the price changes that consumers and household managers face over a stated period.
What is Rationing as a function of price mechanism?
This is when consumers and producers respond to information( signalling) and incentive provided by the prices then scarce resources will be rationed between competing uses
What is the measure of how much consumers will respond to price changes?
a consumer will respond to the price changes in such a way that it could express its marginal utility
How do you measure whether producers respond to a price change?
a consumer will respond to the price changes in such a way that it could express its marginal utility
Change in market price?
Changes in the market price is determined by demand of a product. If consumers demand the product, then the price will increase.
Demand is said to be elastic if?
buyers do not respond much to changes in the price of the good.
Why does the government sometimes set prices?
Governments sometimes set prices to protect producers and consumers from dramatic price swings.
A demand curve is an accurate tool for predicting the decisions of consumers as long as what condition exists?
haha
What is the value of the consumer price index?
The consumer price index (CPI) provides a method for calculating the price changes that consumers and household managers face over a stated period.
What is Rationing as a function of price mechanism?
This is when consumers and producers respond to information( signalling) and incentive provided by the prices then scarce resources will be rationed between competing uses
What is the total goods and services in the economy available at all possible price levels?
Consumer Price Indexes is monthly data on changes in the prices paid by consumers for a goods and services.
Find at least two specific current examples of non-price determinants that shift demand in the market?
There are a number of non-price determinants that can shift demand in a market. Some of the most common include changes in income, changes in prices of complementary or substitute goods, changes in consumer tastes or preferences, and changes in the number of consumers in the market. For example, an increase in income will lead to an increase in demand for most goods and services. This is because as consumers have more money to spend, they are able to purchase more of the things they want and need. A change in the price of a complementary good, such as a decrease in the price of gasoline, will also lead to an increase in demand for automobiles. This is because consumers will have more money to spend on automobiles if the price of gasoline is lower. Similarly, a change in the price of a substitute good, such as an increase in the price of coffee, will lead to a decrease in demand for tea. This is because consumers will substitute coffee for tea if coffee becomes relatively more expensive. Finally, changes in consumer tastes or preferences can also lead to changes in demand. For example, if more consumers become interested in healthy eating, there will be an increase in demand for fruits and vegetables. Conversely, if more consumers become interested in fast food, there will be an increase in demand for hamburgers and fries.
What are the four economic questions?
-What should the economy produce? Market economies use price to answer this question. For example, Product X at a very high price may not sell, thus producers may stop making the product. -How should goods/services be produced? Producers combine resources (consumers sell factors of production) to make products they can sell. Price of factors of production influence producer decisions to make or not to make a product -Who should receive the goods/services produced? Incomes limit choices and decisions of consumers as they respond to price in the marketplace. Consumers earn incomes based on their contributions (factors of production) to production of goods/services. -How should the economy provide for growth? Producers increase the supply of goods and services in response to price in the marketplace. Consumers earn increased incomes as they respond (offer their labor or capital) to the price of factors of production.
What can bring about a change in quantity of demand?
Demand shifts if any determinant except the good's own price changes. Shifters include changes in income, changes in the prices of related goods, the number of consumers, and expectations of future prices.
