Prices and markets. Types of market, страница 9

The aim of most advertising is to move the demand curve for the advertised product to the right. If a successful advertising campaign is carried out on behalf of a good which has a number of close substitutes (e.g. a particular brand of instant coffee), it may also have the effect of moving the demand curves for the competing products to the left.

·  Hire purchase

Many durable consumer goods are bought on hire purchase. The demand for such goods will be seriously affected if there are changes in the terms on which hire-purchase facilities are available. If they are made easer (by means of smaller deposits and longer periods for repayment), the demand curves for many goods will move to the right. The opposite will happen when hire-purchase terms are made less favorable. The demands for cars, motor cycles, electrical appliances and furniture are very much influenced by changes in hire-purchase terms.

1.6.2 The effects of changes in demand

We can look at the effects of changes in demand by assuming that the conditions of supply do not change. For this purpose we can make use of Figure 1.5, which can be used to show the effects of an increase in demand and of a decrease in demand.

An increase in demand raises the price and increases the quantity supplied. A fall in demand lowers the price and reduces the quantity supplied.

·  An increase in demand

Assume that the original demand curve in Figure 1.5 is DD, so that the equilibrium price is OP, and a quantity OQ is demanded and supplied. An increase in demand moves the demand curve to D1D1. The immediate effect is to cause a shortage at the existing price, because the quantity demanded at price OP is now greater than the quantity supplied. This shortage, which is shown by the dotted line, will force the price upwards. As the price rises, more will be supplied, until a new equilibrium price of OP1 is arrived at. At this price, the quantity demanded (OQ1) is equal to the quantity supplied (OQ1).

Other things being equal, an increase in demand will raise the price and increase the quantity supplied.

·  A decrease in demand

In this case, we assume that the original demand curve is D1D1, so that the equilibrium price is OP1 and a quantity OQ1 is demanded and supplied. A fall in demand now moves the demand curve to the DD. The immediate effect of this change is to cause a surplus at the existing price, because the quantity demanded at price OP1 is now less than the quantity supplied. This surplus, which is equal to the heavier section of the price line, will force the price downwards. As the price falls, the quantity supplied will decrease until a new equilibrium price of OP is established. At this price, the quantity demanded (OQ) is equal to the quantity supplied (OQ).

Answer these questions based on the text above:

1.  How do you understand the market or equilibrium price?

2.  What does the term “changes in demand” mean?

3.  Explain your understanding of “an increase in demand” and “a fall in demand”.

1.6.1 Причины движений кривой требования

·  Изменения в доходе

Увеличение реального дохода, в большинстве случаев, увеличит требование на товары и услуги; падение дохода уменьшит требование на большинство товаров и услуг. Строго говоря, это - изменения в налоге располагаемого дохода, и льготы социального обеспечения будут иметь важные эффекты по требованию и изменять положения кривых требования.

Есть некоторые обстоятельства, однако, где увеличение реального дохода могло бы заставить требование на пользу или обслуживание падать. Некоторые предметы потребления описаны как низшие товары, потому что увеличение реального дохода заставляет людей покупать меньше из них. То, какие товары, случается, являются 'низшими', зависит от существующего уровня жизни. В Западной Европе и Северной Америке, например, было серьезное снижение в требовании на общественный транспорт, поскольку доходы повысились, и больше людей было в состоянии предоставить легковые автомобили. В тех же самых областях требование на хлеб падало много лет. Поскольку уровни жизни повысились, хлеб стал намного меньшей частью диеты людей. Когда реальные доходы были намного ниже, хлеб представлял главную часть пищи, потребляемой многими людьми.