Understanding Demand in Business

What is the primary consequence of overestimating demand in business?

• Excess stock and wastage

• Improved market share

• Increased sales revenue

• Higher consumer satisfaction

According to the law of demand, what happens when prices decrease?

• Demand remains constant

• Demand decreases

• Demand becomes unpredictable

• Demand increases

How does a decrease in the price of a substitute product affect demand?

• Increases demand for complementary goods

• Decreases demand for the original product

• Has no effect on demand

• Increases demand for the original product

What impact does an increase in consumer income generally have on demand for premium products?

• Decreases demand

• Shifts demand to basic goods

• No impact on demand

• Increases demand

Which factor is most likely to cause a sudden increase in demand for a trendy product?

• Demographics

• Fashions and preferences

• Consumer income

• Advertising

What is a key strategy businesses use to maintain high demand for their products?

• Expanding product lines

• Increasing production

• Investing in advertising

• Reducing prices

How do businesses use demographics to influence demand?

• By increasing advertising budgets

• By reducing product quality

• By targeting specific market segments

• By setting lower prices

What is an example of an external shock that can affect demand?

• A seasonal sale

• A natural disaster

• A change in consumer preferences

• A new advertising campaign

How did the Covid-19 pandemic impact demand for certain products and services?

• Increased demand for luxury goods

• No impact on demand

• Decreased demand for certain products

• Increased demand for all products

Which products are likely to see increased demand during the winter season?

• Ice cream and gardening tools

• Beachwear and sunscreen

• Camping equipment and sunglasses

• Slippers and winter coats