Question

The determinants of demand are:

1) i. factors that affect a consumer's minimum willingness-to-pay for various quantities of a good or service
2) ii. factors other than price that affect the quantity of a good or service a consumer is willing and able to purchase
3) iii. factors that affect a consumer's maximum willingness-to-pay for various quantities of a good or service

Answer 1

Demand is influenced by factors such as willingness to purchase, ability to purchase, prices of related goods, and the size or composition of the population.

Demand refers to the amount of a product or service that consumers are willing and able to purchase at each price. It is influenced by several factors other than price:

1. Willingness to purchase: This is determined by consumer tastes and preferences. If someone desires a product, they are more likely to buy it.
2. Ability to purchase: Income plays a role in determining the ability of consumers to purchase goods and services. Higher income individuals may have a greater demand for certain products.
3. Prices of related goods: The price of similar or substitute products can influence the demand for a particular product. For example, if the price of one car brand increases, consumers may switch to a cheaper alternative.
4. Size or composition of the population: The characteristics of the population, such as the number of children or driving-age individuals, can affect demand for certain products. For instance, families with more children may have a higher demand for clothing.