Question
Variables typically included in a multivariate demand function (other than the price and quantity of the item the demand function represents) are consumer tastes and
Variables typically included in a multivariate demand function (other than the price and quantity of the item the demand function represents) are consumer tastes and preferences, the number of buyers, spendable (disposable) income, prices of substitute goods, prices of complementary goods, advertising expenditures, weather, and expectations. Recalling that the price of the item being considered is placed on the vertical axis, and the quantity on the horizontal axis, the other variables are termed demand shifters. Please answer the following questions about the affect changes in other variables might have on thedemand for the item. These changes will either cause demand toincrease (shift right) ordecrease (shift left). Use either word as applicable, for the short answer.
- If the demand for a specific brand of a good (for which many substitutes exist) decreases and there is no decrease in the demand for this type of good, then the demand for a substitute _____________ .
- If the number of potential consumers for the good being considered decreases, then the demand for the good being considered likely:
- If the demand for Lattes increases, then the demand for biscotti (a complementary good) should:
- Suppose new antioxidant properties for broccoli are discovered. Antioxidant properties supposedly help prevent cancer. As a result of this discovery, the demand for broccoli can be expected to___________ .
5. The Organic Light Emitting Diode (OLED) is a new and promising display technology. It promises to permit display screens to be thin, flexible, and bright. It is currently available only in small size. This technology works somewhat like a firefly, utilizing electroluminescence.However its competitor, the Liquid Crystal Display (LCD), can now be produced as one piece panels up to six feet tall. The OLED is its own light source, requiring no backlighting as does a LCD. Assuming the LCD and OLED have the same sized screen, future demand for the older LCD display can probably be expected to __________ .
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