A Complementary good is a product or service that adds value to another. In other words, they are two goods that the consumer uses together. For example, cereal and milk, or a DVD and a DVD player.
Which of the following will cause an increase in the demand for a product A?
An increase in income will tend to increase the demand for a product. When two products are substitute goods, the price of one and the demand for the other will tend to move in the same direction. If two goods are complementary, an increase in the price of one will tend to increase the demand for the other.
What is a product that increases the use of another product *?
A substitute is a product or service that can be easily replaced with another by consumers.
| A B | substitutes product that can be used in place of other products. | complements products that increase the value of other products; products related in such a way that an increase in the price of one reduces the demand for both. EXAMPLE MILK AND CEREAL |
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What does advertising fashion trends and the introduction of new products do in the market?
Answer Expert Verified. Advertising, fashion trends and new product introductions create consumer demands . It creates consumer demands because the product is being used by most of the people since it is becoming one of the latest trends in the community.
Who buys a product?
The person who pays and purchases a product is called a consumer .
When a consumer’s need for a product is not urgent?
| A B | When a customer’s need for a product is not urgent, demand tends to be? elastic | All of the following can change the market supply curve the cost of labor., the expectation that prices are about to increase. and the numbers of sellers offering the product. |
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Is food a normal good?
Normal goods has a positive correlation between income and demand. Examples of normal goods include food staples, clothing, and household appliances.
What are the three factors that influence demand for a product?
- Price of the Product. ...
- The Consumer’s Income. ...
- The Price of Related Goods. ...
- The Tastes and Preferences of Consumers. ...
- The Consumer’s Expectations. ...
- The Number of Consumers in the Market.
What are the 5 factors that cause a change in demand?
The quantity demanded (qD) is a function of five factors— price, buyer income, the price of related goods, consumer tastes, and any consumer expectations of future supply and price . As these factors change, so too does the quantity demanded.
What is the reason for decrease in demand?
Decrease in demand may occur due to the following reasons:
(i) A goods has gone out of fashion or the tastes of the people for a commodity have declined . (ii) Incomes of the consumers have fallen. (iii) The prices of the substitutes of the commodity have fallen. (v) The propensity to consume of the people has declined.
For which product is demand likely to be the most elastic?
Many factors determine the demand elasticity for a product, including price levels, the type of product or service, income levels, and the availability of any potential substitutes. High-priced products often are highly elastic because, if prices fall, consumers are likely to buy at a lower price.
What is the main difference between a good and a service?
Goods and services are two important types of purchases people make. A good is a tangible or physical product that someone will buy, tangible meaning something you can touch, and a service is when you pay for a skill . A service is something intangible, which can’t be physically touched or stored.
What is the relationship between income and demand?
In the case of normal goods, income and demand are directly related , meaning that an increase in income will cause demand to rise and a decrease in income causes demand to fall. For example, for most people, consumer durables, technology products and leisure services are normal goods.
What replaces a costly item with a less costly one?
Which of the following replaces a costly item with a less costly one? Consider the term marginal utility .
Why is it important for businesses to know a product’s demand elasticity?
Price elasticity is important to firms because it influences the price the firms will charge for their products or services . Additionally, it will help businesses develop strategies, maximize profit, and reduce risk.
