Essay Plans

Why may the demand schedule for a commodity change?

SYNOPSIS:

POINTS:

  1. Decline demand schedule: a statistical table relating the price of a commodity to the demand for it per unit of time.

  2. Factors affecting the demand schedule:

    a. Price (mention inverse relationship)
    b. Draw a diagram showing contraction and extension of demand
    c. Incomes - show how this affects a shift
    d. Change in the price of closely related goods - go though cross-elasticity of demand.
    e. Taste - show how this may be affected by advertising
    f. Ability to gain credit - (give examples) - mention Hire Purchase restrictions.
  3. Expand on income - how this is affected by tax (disposable) and inflation (real) unemployment benefits, national insurance contributions. Distinguish between real and disposable and how if income rises demand for inferior goods will fall, for luxury goods rise.
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