Managerial Economics

Introduction

China is a biggest manufacturers of fashion clothing apparel in the world. Get the data. They export their products worldwide, mainly to developing countries such as Africa (sub-Saharian), some Asian countries, and Latin America. Some of the products are using China brands such as GW… but some others are plainly fake products such as Baby GAP, NEXT, Crocodile, Burberry, and others.
These products even though are fake, gain their popularity because of their cheap price and also …

Using the Managerial Economics theories such as Demand, Inferior Good
We are going to analyze why this economic phenomenon happened.

Theories and Analysis
Demand function analysis
Demand is the amount of good or service consumers are willing and able to purchase during a given period of time. Six variables influence quantity demanded: 1. Price of the good, 2. Income of consumers, 3. Price of related good, 4. Consumer’s tastes, 5. Expected future price of the good, 6. Number of consumers in the market. According to the Law of Demand, price and quantity demanded are conversely related. Quantity demanded increase (decrease) when price falls (rises) and other things held constant, so Consumers will purchase more of a good at lower prices and less of a good at higher prices.
Income of consumers
Consumer income is a key determinant of consumer demand. The relationship between income and demand can be both direct and inverse. Considering that fake brands are Inferior goods, income and demand are inversely related, which means in developing countries an increase in income leads to a decrease in a fake brand products and a decrease in income leads to an increase of fake brand products.
Price of goods
The price of fake brands in developing countries is relatively low or cheaper than the originals, therefore most of people in developing country as