Please enable JavaScript.
Coggle requires JavaScript to display documents.
Factors affecting demand (Investment (Increase in capital (Reduction in…
Factors affecting demand
Investment
-
-
Education and Work Force
Higher skilled workers result in increased worker's efficiency, hence increased productivity of firms.
Investment is an injection into the circular flow of income. Investment allows firms to raise capital for growth, as they have more money to spend.
Investment allows firms to develop better quality goods and services.
Investment allows consumer wealth to increase and increases individuals income, due to profits sharing (dividends) and a rising value of assets.
-
Govt Spending
Increase in Government Spending , increases the amount of money going into businesses, through infrastructure, further increasing employment which increases disposable income, that could be used on goods and services increasing the demand. If demand increases, government spending will also increase due to the higher demand
Price- Subsides makes goods and services more affordable for consumers by decreasing the price by lowering the cost of produc Thus consumers demand for goods and services are increased, despite constant disposable income.
Example: $4 Billion Energy Efficient Home Packages: Governments helped households cut energy usage through the subsidisation of more energy efficient household appliances
-
Decreases proportion of disposable income spent on electricity and theses appliances, therefore there is more money available to be spent on goods and services further increasing effective demand.
-
-
-
Distribution of people
sex
The sex of an individual determines their ability to buy specific g+s and also limits their ability to consume g+s, thus influencing demand of varying g+s
socio economic status
the SES of an individual will determine their ability to buy particular g+s and prioritise different g+s due to their ability to buy g+s
-
-