...Bang College of Business The difference between needs, wants and demands and the various factors that influence human consumption. Monandniso Tursunova ID: 20111449 MKT 3140: Intermediate to Marketing Dr. Kim Chung 20.02. 2012 Outline 1. Introduction a) The concept of needs wants and demands. b) The factors influencing the consumption behavior 2. Body a) Maslow’s Hierarchy of needs b) The difference between the demands and wants 3. Conclusion a) Marketing reflects the needs and wants of customer b) Marketing shapes the needs and wants of customer c) My point of view about the marketing position A Penny Saved Is A Penny Earned. Different people have different preferences, opinions and tastes. Everyone is unique by its nature and characteristics. And to understand all these diversity marketing industry should put a lot of efforts. In order to satisfy their demands needs and wants they should face them directly. They have to make appropriate and even unusual approach to catch the attention of audience. First of all let’s look to the concept of needs, wants and demands. What are they?? And why marketers do worry about them a lot?? As we already mentioned needs, wants and demands are basic factors of marketing principles. Even though they are three simple words, they hold complex meaning behind them along with a huge differentiation factor. Generally a product can be defined on the basis of whether it satisfies...
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...talk about the difference between a movement along and a shift of the demand curve we have to know that one works off of demand and the other works off of quantity demand. They both work off the law of demand but it states that when the quantity demand rises the price will tend to fall. On the other hand when the quantity supplied goes up the prices will go up too. What we will talk about it the following. How equilibrium price and demand is impacted by an increase in supply and demand, increase in both. Lastly I will talk about the role that supply and demand is used in making decisions in a real world scenario. There are some factors that can affect the supply and demand that are not just price and this is what is called shift factors. The shift factors in demand can include things such as, prices of other products, tastes, the expectations and also the taxes. Shift factors in supply would include the price of inputs, technologies. There is a difference in demand and quantity demand, demand is described as a good that will be bought at various prices as on the other hand quantity demand is a good that can be bought at a specific price. The movement along the demand curve is when there is a change in the price which changes the quantity demand. The shift in the demand curve is when there is a change in anything other than the price that will end up affecting the demand and will change the entire demand curve. The difference between the movement along the demand curve and shift...
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...Mastery 100% Questions 1 . Revenue increases when • A. producer surplus increases Correct : Producer surplus is the difference between the minimum price the producer is willing to receive and what they actually receive. The surplus is their profit, and the larger the surplus, the greater their profit on the good. When it decreases, the producer receives a price closer to the minimum acceptable. The consumer surplus measures what the consumer is willing to pay and that price’s difference from the market price. The closer to the market price, the higher the consumer surplus, as consumers are spending less than they are willing to, and the less spent, the lower the revenue will be for the good. Materials • Producer Surplus 2 . An increase in the price of an inelastic goods • C. increases revenues Correct : Inelastic goods are necessities that consumers continue to purchase even when the price increases. This increases the revenue, as more is paid for each good. The percentage change in price increases faster than the change in quantity, which may remain constant. When more is paid for a good or a service, revenue increases. Materials • Price Elasticity and the Total-Revenue Curve • Inelastic Demand 3 . Price elasticity of Demand increases whe • C. people become more price sensitive over time Correct : Price elasticity of demand measures the percentage...
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...business marketing is sometimes referred to as business-to-business marketing, or B2B marketing, for short. (Note that while marketing to government entities shares some of the same dynamics of organizational marketing, Business-to-government marketing is meaningfully different.) ------------------------------------------------- Business & Consumer Markets ------------------------------------------------- Business markets have a derived demand - this means that a demand in business markets exists only because of another demand somewhere in the consumer market. Lets take a few examples : * The government of India wishes to purchase equipment for a nuclear power plant in Jaipur, which a business market demand. The underlying consumer demand that has triggered this particular business market demand is that people of India are now consuming more electricity - they have bought more washing machines, microwaves, computers, and re-chargeable electronic devices. * The demand for restaurant furniture is based on the consumer demand for more restaurants....
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...of countries can be determined by the ratio of export growth and the income elasticity of demand for foreign goods. Particularly, the model uses the balance of payment as an indicator to determine counties growth rate. Base on the article, this essay is separated into three parts, first, introduces the article in relation to Thirlwall’s law. Second, demonstrates the arguments of Thirlwall’s law. Lastly, examines the weakness of the model. The present section briefly introduces the aims of Thrilwall’s paper. Firstly, the paper (Thirlwall 1979) judged the classical approaches by using productivities and factor supplies to explain the different growth rate between countries that was not satisfactory. As the result, the differences could be explained by the constraints on demand; indeed, the balance of payment is the central constraint for an open economy. Then, the paper predicts that the growth rate can be examined by the relation between foreign countries’ rate of income expansion, which are the income elasticity of demand for export and the income elasticity of demand for imports (Grullon 2011). Moreover, the paper used developed countries as evidence to approximate the growth rate by using the balance of payment constraint growth model. The first argument of Thirlwall’s law lies on the constraint on demand instead of supply side, by explaining the differences in growth rate between countries. The paper (Thirlwall 1979) stated that under certain assumptions, a country’s...
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...Table of Content | Content | Page | | Table of Content | | 1.0 | Introduction……………………………………………………............................. | 1 | 2.0 | Price Elasticity of Demand for Sugar2.1 Availability of Close Substitutes……………………………………………….2.2 Length of Time Involved…...…………………………………………….........2.3 Necessities versus luxuries……………………………………………………..2.4 Definition of market……………………………………………………….......2.5 Share of sugar in the consumers’ budget…………………………………....... | 2 – 345 – 67 – 89 – 10 | 3.0 | Conclusion……………………………………………………………………….... | 11 | 4.0 | Bibliography……………………………………………………………………..... | 12 | | Appendix…………………………………………………………………............... | 13 | Table of Figures Figure | Page | Figure 1: Availability of close substitutes for sugar…………………………………. | 3 | Figure 2: Differences of long run and short run for price hike in sugar…………….. | 4 | Figure 3: Differences between necessity goods (sugar) and luxury goods (honey)…. | 6 | Figure 4: Differences between narrow market and broad market……………………. | 8 | Figure 5: Differences between middle-income and low-income consumers with high-income consumers……………………………………………………………… | 10 | 1.0 Introduction According to the article that was chosen, the Price Elasticity of Demand for Sugar in Malaysia is focused. The group members interpreted and analysed the article based on the core microeconomic concept of Elasticity. The analysed article is attached in the Appendix. The article is mainly regarding the issue...
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...elasticity of demand for a business can be shown by the effect that it has on total revenue. The business will want to know whether a proposed price change will increase or decrease total revenue. Total revenue, by definition, is equal to the price times the quantity sold (TR=PxQ). [sometimes, when dealing with elasticity, the language used may call this total expenditures instead of total revenue, but it has the same meaning].Note what happens to the results of this formula (TR=PxQ) if a price change is involved. Due to the law of demand, the price will move in one direction, and the quantity sold will move in the other direction. Unless the price change and quantity change are both for the same percentage (unit elastic), then total revenue will also change whenever a price change is involved. The question is, does total revenue increase, or decrease? The answer depends on the direction of the price change along with the price elasticity of demand. If the price elasticity of demand is elastic (greater than 1), then that means that the quantity change is more than the price change. So total revenue (price times quantity) will decrease for a price increase, and increase for a price decrease. If the price elasticity of demand is inelastic (less than 1), then that means that the quantity change is less than the price change. So total revenue (price times quantity), increases for a price increase, and decreases for a price decrease. In summary: Elastic demand, price increase:...
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...Microeconomics Chapter 1 1.1 The scarcity principle (also called the no-free-lunch principle). Although we have boundless needs and wants, the resources available to us are limited. Consequently, having more of one good thing usually means having less of another. 1.2 The cost-benefit principle. An individual (or a firm, or a society) should undertake a particular action if, and only if, the extra benefits of undertaking that action are at least as great as the extra costs. 1.3 Economic Surplus is the gain that results from undertaking an action when the benefits outweigh the costs. Simply, it is the difference between the benefit and its cost. Opportunity cost is the value of the next-best alternative to undertaking a particular action. The incentive principle. A person (or firm, or society) is more (less) likely to undertake an action if its benefit (cost) rises, and less (more) likely to undertake it if its cost (benefit) rises. In short, incentive matter, and can be powerful in shaping economic choices. Predicting how people's behaviour will be affected when the incentives they face change is the role of positive economic analysis. In contrast, normative economics is concerned with statements about what actions should or ought to be undertaken. 1.4 A sunk cost is a cost that cannot be recovered at the moment a decision is made. Chapter 2 2.1 The principle of comparative advantage is everyone can do better when each person (or each country) concentrates on the activities for...
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...6. The demand function is Q = 100 –.5P. The cost function is TC = C = 100 + 60(Q) + (Q)26. The demand function is Q = 100 –.5P. The cost function is TC = C = 100 + 60(Q) +(Q)2 a. Find MR and MC. MR = 520 – 4Q MC = 100 + 2Q MR = 520 – 4Q MC = 100 + 2Q 520 – 4Q = 100 + 2Q b. Demonstrate that profit is maximized at the quantity where MR = MC. Profit = TR – TC TR = P*Q = ($380 per unit)(70 units) = $26,600 2 TC = 100Q + Q + 50 = 100(70) + (70)(70) + 50 = $11,950 Profit = $14650 c. Derive the relationship between marginal revenue and the price elasticity of demand,ands how that the profit-maximizing price and quantity will never be the unit-elastic point on the demand curve. When a business is trying to-maximize prices the quantity is MR=MC, marginal revenue=marginal cost. When both the graph shows marginal revenue (MR) and marginal cost(MC) the point of intersection. This would be the profit-max quantity. Next is the corresponding price. In the best competition, price=marginal revenue, that is considered constant, but when the economy, is poor the demand withe profit-max quantity is at the demand curve. d. Using the information in(b),demonstrate that the profit-maximizing price and quantity will never be in the inelastic portion of the demand curve. 7. Explain the competitive process when a firm earns a positive economic profit. In the long-term a business may decide to change the factors on the business. This ability changes input factors in the long term allowing...
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...ECO 201 Assignment 1 Explain the difference between the law of demand and the law of supply. What does the phrase ‘other things equal” mean? Why do we need that? Answer: The difference between the law of demand and the law of supply is that they both move into opposite direction. The law of demand states that the consumers will demand more of goods or services if the price goes down. The variable of the price drop creates an incentive to increase the demand for the goods and services. The law of supply moves in the opposite direction with its main focus being the suppliers of goods or services. There will be a larger incentive for the increase of goods supplied if the price increases. Both of these laws use the “other things equal” assumption or ceteris paribus. This assumption is used when identifying the relationship between two variables like a price and quantity. By using this assumption, economists can isolate the variables so other factors will not affect the development of the theory. When we see the term other things equal we know that this assumption is made to indicate that other variables are not changing or affecting the variables of interest. Without this assumption it would be impossible to develop theories about the relationships and make a causal connection between two variables that can be identified. 2 In your own words, explain the difference between a movement along the demand curve and a shift in demand. Then, provide an example from your own...
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...Controlling Demand through Pricing: A report on the quantitative analysis of the ChocoMint bar Introduction ChocoMint is a bar of chocolate under ChocoHeaven, which is a distributor of organic chocolate. In recent years, the business of ChocoMint bar encountered some problems. Since the ChocoMint bar is manufactured overseas, the supply chain could be unreliable. Besides, as ChocoMint is stored at special storage locations in the UK, the storage capacity for this kind of product in the UK is limited. Therefore, in order to prevent the storage from exceeding the company’s storage capacity limits, as well as reduce the risk from supply chain (relying less on the overseas supply chain), sales department of ChocoHeaven has been trying to keep the demand into control by pricing the product differently according to different market tendency. To implement the corresponding price strategy and make it more effective, ChocoHeaven have closely monitored the monthly price and the corresponding sales of the ChocoMint bar over the past two years, which helps to discover the most suitable relationship between changes in volume of demand corresponding to changes in prices. Based on data provided, this report analyses relative changes in demand as price changes by using both statistics and graphs, trying to identify the most suitable model for the relationship between the price and demand. Subsequently, the model will be used to predict changes in demand corresponding to different prices,...
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...market. Trade industries. Government. Public and private institutions. 5 Th.S Đinh Tiên Minh 1.1. Concepts of Business Market (cont’) Characteristics of Industrial Market: Geographic market concentration Sizes and number of buyers The purchase decision process Buyer-seller relationships Evaluating international business markets 6 Th.S Đinh Tiên Minh 3 29/08/2012 1.1. Concepts of Business Market (cont’) Customer value in Business Markets: The economic, technical, service and social benefits received by a customer firm in exchange for the price paid for the product or service offering. Anderson and Narus, Business Market Management, Pearson Education, 2nd edition, p5-9. A ratio between what the customer gets (functional and emotional benefits) and what he gives (monetary, time, energy cost). Philip Kotler, Marketing Management, Prentice Hall India, 11th edition, p11-12....
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...Section – I 1 Citrus Speculation and Forecasting, Inc, has been hired by a private consortium of orange growers to predict what will happen to the price and output of oranges under the conditions below. What are your predictions? For each part, sketch a graph showing the appropriate demand and supply analysis. a) A major freeze destroys a large number of the orange trees in Florida. b) The American Medical Association announces that drinking orange juice can reduce the risk of heart attack. (Marks 10) 2) During a year of operation, a firm collects Rs. 2,00,000 in revenue and spends Rs. 90,000 on raw materials, labor expense, utilities, and rent. The owners of the firm have provided Rs. 4,00,000 of their own money to the firm instead of investing the money and earning a 10 percent annual rate of return. a) The explicit costs of the firm are $ __________. The implicit costs are $ __________. Total economic cost is $ __________. b) The firm earns economic profit of $ __________. c) The firm’s accounting profit is $ ______________. (Marks 5) Section – II (2 marks each) 1) Which of the following is/are the outcomes of sinking of a vessel transporting crude oil to a country that is completely dependent on imports for oil? a) A fall in the quantity supplied of crude oil in the country. b) A rise in the prices of crude oil. ...
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...inelastic demand Elastic and inelastic demand Task A 1. Elasticity of Demand measures sensitivity of the demand for a good to a price change. If the price of a good matters little, a change in the price of that good will have a small impact on one’s willingness to sell or buy and this would indicate an inelastic situation. However, if a small change in prices causes substantial changes in one’s willingness to buy or sell, the good is said to be elastic. McConnell, Brue, and Flynn (2012) note that when demand is elastic a decrease in price will increase total revenue because even though the price is less the additional goods sold make up the difference. Conversely, if the demand is inelastic, price decreases reduce total revenue. When the percent of increase or decrease in the price of a good is equal to the demand percentage the case is unit elastic. 2. Cross-price elasticity of demand measures the sensitivity of quantity demanded of a good when the price changes on another good. When two goods are substitutes, the price of one good increases the demand for another good. Airlines A and B have routes that are the same. As airline, A raises the price of their tickets consumers will likely change to airline B. This is a simple explanation of substitution. A good is considered a complement to another when the demand of product A is increased after the price of product B is decreased. 3. Income elasticity measures the relationship between a change in demand for a...
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... Study advice: Try to prepare for the exam in advance in order to get enough sleep the night before. Get plenty rest the night before. This will help you to read the questions carefully. I estimate about 5% of the misses are due to careless reading. Study your assigned homework problems and blackboard quizzes. Use the handout that I prepared for you: Arbitrage & Speculation. Lecture 1 The Economic Approach Related Readings Chapter 1 Define Economics in two ways and understand the difference between each way. Know the meaning and relationship between the following concepts covered in the first lecture: scarcity, rationing/rules, competition and choice. Know especially the concept of opportunity cost and choice. Be able to work opportunity cost problems similar to cost of college and the alternative ways of travel problems that we did in class and on homework. Know the difference between normative and positive. Know the difference between positive sum games, zero sum games and negative sum games as discussed in the lecture. Economists use incentives to set up positive win-win games as in my classroom examples of Australia & golden content in trash. What is meant by the moral hazard problem? Understand the Eight Guideposts of economic thinking as discussed in your text. Go over the pitfalls of economic reasoning: Review the blackboard problems that you were assigned (especially the two on marginal analysis), but also the others...
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