demand curve

Examples of demand curve in the following topics:

• Impacts of Supply and Demand on Businesses

  • Using this logic, we can construct a demand curve that shows the quantity of a product that will be demanded at different prices.
  • The supply curve goes in the opposite direction from the demand curve: As prices rise, the quantity of apples that farmers are willing to sell also goes up.
  • We do this by plotting both the supply curve and the demand curve on one graph.
  • The supply and demand curves intersect at the price of $0.60 and quantity of 2,000 pounds.
  • The demand curve would change, resulting in an increase in equilibrium price.

• Impacts of Supply and Demand on Pricing

  • Equilibrium is defined as the price-quantity pair where the quantity demanded is equal to the quantity supplied, represented by the intersection of the demand and supply curves.
  • That is, the quantity demanded typically rises causing a downward sloping demand curve.
  • A demand curve shows the quantity demanded at various price levels.
  • Demand-oriented pricing focuses on the nature of the demand curve for the product or service being priced.
  • The nature of the demand curve is influenced largely by the structure of the industry in which a firm competes.

• New Product

  • Price skimming involves the top part of the demand curve.
  • A penetration strategy would generally be supported by the following conditions: price-sensitive consumers, opportunity to keep costs low, the anticipation of quick market entry by competitors, a high likelihood for rapid acceptance by potential buyers, and an adequate resource base for the firm to meet the new demand and sales.
  • In this case, "premium" doesn't just denote high cost of production and materials, it also suggests that the product may be rare or that the demand is unusually high.

• Demand-Based Pricing

  • Demand-based pricing uses consumer demand (and therefore perceived value) to set a price of a good or service.
  • Price skimming is sometimes referred to as "riding down the demand curve."
  • Demand-based pricing is any pricing method that uses consumer demand, based on perceived value, as the central element.
  • Price skimming is sometimes referred to as riding down the demand curve.
  • Illustration of price points, or concave-downward cusps on a demand curve (P is price; Q is quantity demanded; A, B, and C are the price points)

• Stability Through Fiscal Policy

  • Governments use fiscal policy to influence the level of aggregate demand in the economy, in an effort to achieve economic objectives of:
  • This causes a lower aggregate demand for goods and services, contrary to the objective of a fiscal stimulus.
  • Therefore, when foreign capital flows into the country undergoing fiscal expansion, demand for that country's currency increases.
  • The increased demand causes that country's currency to appreciate.
  • The "aggregate supply" and "aggregate demand" curves for the AS-AD model.

• Control of the Money Supply

  • A decrease in the interest rate will spark an increase in the consumer demand for money; an increase in the rate of interest will lessen its demand.
  • Any increase in the demand for money will increase spending levels and cause prices to rise.
  • If consumers expect price levels to fall, the demand for money will increase.
  • If consumers expect price levels to increase, the demand for money will decline.
  • The main functions of the central bank are to maintain low inflation and a low level of unemployment, although these goals are sometimes in conflict (according to Phillips curve).

• Innovation

  • This process has been proposed that the life cycle of innovations can be described using the "S-curve' or diffusion curve.
  • The S-curve maps growth of revenue or productivity against time.
  • At some point customers begin to demand and the product growth increases more rapidly.
  • Successive S-curves will come along to replace older ones and continue to drive growth upwards .
  • In the figure above the first curve shows a current technology.

• Employment Levels

  • The Phillips curve tells us that there is no single unemployment number that one can single out as the full employment rate.
  • Cyclical unemployment occurs when there is not enough aggregate demand in the economy to provide jobs for everyone who wants to work.
  • The implication is that sustained high demand may lower structural unemployment.
  • Frictional unemployment exists because both jobs and workers are heterogeneous, and a mismatch can result between the characteristics of supply and demand.
  • Short-run Phillips curve before and after Expansionary Policy, with long-run Phillips curve (NAIRU).

• Analysis

  • The first step in the business analysis is to examine the projected demand.
  • Operating costs that account for possible economies of scale and learning curves.

• Status-Quo Pricing of Existing Products

  • One strategy does not fit all, so adopting a pricing strategy is a learning curve—studying the needs and behaviors of customers and clients is essential.
  • The first, derived demand, referes to buying sensitivity relative to the price of the end benefit; the more sensitive they will be to the prices of those products that contribute to that benefit.