Understanding Demand in Business

What is the primary consequence of overestimating demand in business?

• Higher consumer satisfaction

• Improved market share

• Excess stock and wastage

• Increased sales revenue

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

• Demand increases

• Demand remains constant

• Demand becomes unpredictable

• Demand decreases

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

• Decreases demand for the original product

• Increases demand for the original product

• Increases demand for complementary goods

• Has no effect on demand

What is the likely impact on demand if consumer incomes increase?

• Demand for basic goods increases

• Demand for premium goods decreases

• Demand remains unchanged

• Demand for premium goods increases

Which factor is most likely to cause a sudden change in consumer preferences?

• External shocks

• Demographics

• Advertising

• Fads and trends

Why do companies like Apple and Nike invest heavily in advertising?

• To ensure sustained demand

• To reduce production costs

• To increase product prices

• To decrease competition

How do demographics influence demand?

• By reducing advertising needs

• By increasing production costs

• By matching target market characteristics

• By determining product pricing

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

• A natural disaster

• A change in consumer preferences

• A new advertising campaign

• A seasonal sale

How did the Covid-19 pandemic affect demand for certain products?

• Increased demand for all products

• Decreased demand for certain products

• Had no impact on demand

• Increased demand for luxury goods

Which product is likely to see increased demand during winter?

• Gardening tools

• Camping equipment

• Winter coats

• Ice cream