Economics – Reply to Peer’s Discussion Question W2Q2

I have to reply to 2 peer’s post. Please find the attachment of both peers reply. Please compose reply for both posts in the attached documents.Each response should be minimum of 200 words excluding reference. RequirementForums Guidelines CriteriaRequirementsQuality Guidelines (50%):Responses are original in content with a minimum of one external reference.All posts demonstrated analysis of the topic.Responses to classmates are significant and advanced the discussion.Participation Guidelines (30%):Responses to classmates are at least 200 words.Clarity, Organization & Professionalism Guidelines (20%):Responses were organized and logical.No spelling or grammatical errors.References were used and cited properly.Appropriate language, respect and consideration toward peers/instructor.

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Peer Response â?? 1
Determinants of demand are â??factors other than price that locate the position of a
demand curve� (Brue, Flynn, Grant & McConnell, 2014). Determinants are also the relationship
between price and quantity demanded. When determinants change it will cause the demand
curve to shift to the right or left. There are five determinants of demand. The price of the good
or service. The prices of other goods or services and these can be complementary which means
they are purchase with the primary good or substitutes which means they are purchased in
place of. The income of the buyers is the third determinant. The tastes and preferences of the
buyers and finally the expectations of the buyers. If the buyer believes the price of a good will
increase or decrease this will impact demand.
The change in demand is â??a change in the quantity demanded of a product at every
price; a shift of the demand curve to the left or the right� (Brue, Flynn, Grant & McConnell,
2014) If income rises it will lead to shift in demand. The demand curve will move to the right. A
decrease in income will lead to a decrease in demand and shift to the left of the demand
curve. The price of related goods impacts demand. If the buyer can substitute a good the price
for the substitute and the demand for the other good will cause a shift in the demand. For
example, if cost of Coke rises, the demand for a substitute like Pepsi will increase. The
individual buyer preferences, impacts demand. If a consumer prefers a certain product demand
will increase and if they shift preferences to another product, demand will decrease. For
example, a person can change their mind of buying a car from Honda because they no longer
like the design, so they move to a KIA because the style and look are preferred. This increases
demand for Kiaâ??s.
Change in the quantity demanded is the â??movement from one point to another on a
fixed demand curve�(Brue, Flynn, Grant & McConnell, 2014). The movement on the demand
curve is caused by a change in the price of a product. The amount demanded of the product is
at each price is not different, but the price of the product is higher. This means fewer people
will want to but the product at the higher price. On the other hand, a change in demand is
caused by a change in one or all or the determinants of demand. In this case, the amount of a
product demanded at each price is different. If we use the income determinant for example, as
income increases people will buy more product at the given price. With more people buying
the demand shifts to the right.
Researching this question, I came across a simple explanation of the differences: â??a
change in demand results in a shift of the demand curve, the demand itself is changing because
of one of the determinants of demand. While a change in quantity demanded is the result of a
change in supply, which causes movement along the demand curve, it does not change it�
(, 2011).
Peer Response â?? 2
There are five major determinants of demand. These are the price of the good or service, the
prices of related goods or services, the income of buyers, the tastes or preferences of
consumers, and the expectations that consumers have.
Demand refers to the number of goods or services that consumers desire. The demand also
expresses how much people want a given good or service, and how much they are willing to
pay for it. For example, a consumer might want a new iPhone. Her desire for it is a demand.
However, she might not act on this demand (by purchasing a new iPhone) if the price is too
high. In this scenario, the demand is not strong enough to compel a purchase. Because of this,
we must factor in how much a product costs and when it is available to determine the true level
of demand. I have been addressing the case of a single consumer to simplify the variables. But
demand is a market idea. It relates to groups of consumers and their desire for a product and
their willingness to pay a certain price for it. In general, consumers might want the latest
iPhone that I mentioned above. But, if Apple releases a new version too soon, demand will be
low. People will still be using their older model. They will not want to pay hundreds of dollars
again so quickly. Because of this, companies have to manage demand. In fact, they have to
create it. They do this by producing products that people want, and they must release these
products at the proper time. They must also set the price correctly to develop as much demand
as possible. Companies must also consider the relative price of an item. If an iPhone is three
times as much as Samsung without offering greater ability, demand will be low. If the product is
less than the competitor, or possibly equal, demand will be higher.
The price of an item can fluctuate, due to several causes. â??We know that prices can and do
change in markets. For example, demand might change because of fluctuations in consumer
tastes or incomes, changes in expected price, or variations in the prices of related goods.� What
these means is that demand drives price. But demand can be caused by changing consumer
taste. One day, having an Apple product might be fashionable. Demand rises, and prices go up.
If fashions change, and people no longer think of Apple as a cool or necessary brand, the price
will fall.

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