Eight Factors Responsible for Variation in Demand!

Demand: Affordability and willingness of a customer to buy a product or service at a given price are called demand in economics.

Price: Price of a product is inversely proportional to the demand, as the price rises automatically demand the product decreases and price decreases automatically demand of the product increases.

Expectations of price hike: If there is any possibility of a price hike in the future, then present demand increases automatically.

Income: If the income of consumer increases demand also increase as people can consume the number of products or services they want.

Taste, habit and fashion: Consumer's taste, habit and fashion are the key parameters of demand for any goods.

Climate: Climate plays a vital role in demand for certain goods in specific areas.

Complementary goods: Demand of a commodity can be impacted by complimentary goods.

Advertisement: It always attracts people to buy any goods.

Government taxes: Taxes plays a vital role in price, and the price is the key factor of demand for any product.

Four Principles of Individual Decision Making

Principles of Individual Decision-making

In life, we have to make a decision just about everything that we do. These decisions affect our daily lives and they sometimes they affect the lives of those around us. When making these decisions there are make factors that go into making a final one. In economics there are four principles that effect how a person makes a decision.

List of four principles of individual decision making.

• People face trade-offs.
• The cost of something is what you give up to get it.
• Rational people think at the margin.
• People respond to incentives.

These four principles play an important role in economics. This paper will define each individual principle and then give the rater an insight on a personal decision of the author using the aforementioned principles.

People face trade-offs.

Making a trade-offs is basically, choosing one thing over another. As modern technology advances, one could argue that society has traded-offs battery life in personal electronics for a smaller size and weight of the individual device.

The Cost is What You Give Up

After you have looked at what is being traded-offs, then you can determine the true value of your decision by what you are giving up for it. As in the previous example of personal electronics, giving up battery life has a serious downside in that the personal electronic device will have to charge. Here the cost can be a great one to a person that is constantly on the go.

Rational people think at the margin

Being rational means that an individual will do all that they can to achieve their goal with all that they have available to them. A rational personal thinking at the margin or on the edge will be able to make decisions that allow them to achieve their goal without giving up to much in overall cost. Going back to the personal electronic device, an individual could choose to go with the smaller and more lightweight device because of its portability, but they’ll bring along a portable charging device also, or use the product more sparingly to make the most of the available battery power.

People respond to incentives

An incentive can be carried to something positive like a benefit or something negative like a consequence. Incentives can be a large part of an individual decision making process. The incentive that an individual would most likely respond to when choosing the new personal electronic device would be that they are carrying around less weights, therefore making them more mobile. The consequence side that would affect the decision would be rooted in the fact they will not be able to use the device as much as they would like.

Conclusion

In an economy there are four principle that are vital to the decision making process of how it will distributes its resources. The first is Trade-offs, giving up one thing for another. Then the determination of the cost of what you are giving up to get to your goal. Third, is the thought that rational people think at the margin, meaning one will take advantage of all opportunity to achieve one’s goals. Finally, the principle that people respond to incentives, assists in determining the quantity or price of a certain resource. These principles are also applied in individual decision-making, and the results can affect more than just an individual but an entire economy.

How Sneaker demand has increased due to Pop Culture influence on Consumers

Sneakers are essential in the modern wardrobe, and there has been an increase in the number of sneakers that are sold over the last few years. No matter which part of the world are you in there is a pair of sneakers in your closet and the hype is increasing every day thanks to the influence of Pop Culture.

Every time we mention Pop Culture we can see an influence in the clothing and footwear industry. The demand for sneakers has increased due to the catalyst that is known as Pop Culture.

Back To The Future 2

In 1989 when Michel J. Fox wore a futuristic shoe in the movie "Back To The Future 2" that could self-lace, it created an impact in the world to an extent everyone in America wanted that same pair of sneaker. But it was 1989 where such technology did not exist, How could the consumers get their hands on such sneakers? The movie talked about travelling to the future in 2015 and on October 21st 2015 Nike launched the Air Mag. This sneaker could self-lace and has exact same resemblance with the shoe in the movie.

Nike Air Mag

On 29 May 1986, a group of Rappers known as "Run-D.M.C" launched their 3rd album which has a song called "My Adidas". The music video featured the "Adidas Superstars"  and the song was made with pure love for the shoe. The music video became the catalyst for high demand among the consumers in the U.S.A. That year Adidas registered their highest sale for that sneaker.

My Adidas cover art by RUN-D.M.C

Today Pop Culture has affected the Sneaker market so much that every week a new colourway or a new sneaker is produced based on the influence of pop culture. Be it India or the USA the culture influences the taste and preference of the consumer which is one of the factors responsible for the demand of a commodity.

Nowadays Brands has started to take advantage of this factor of demand as they try to find leading artists and athletes to influence the consumers of their new products. The link of Kanye West with Adidas acted as a catalyst for the hype or the huge increase in demand for the "YEZZY" sneakers. Similarly, Michael Jordan has been a huge catalyst in the all-time high demand for the Jordan Brand sneakers which is a part of Nike.

Nike Jordan Air 1 BRED Colourway

Adidas YEZZY SPLY 350 Semi Frozen

The taste and preference of the customer always affect the demand for a product and the culture of a place will always be a key factor in influencing the taste of the consumer.