Determinant demand for beer
Economist deal with principles that help us better understand the behavior of the Consumers determinant in buying a product. The first principle that will be discussed is principle 3: Rational People think at the Margin. Everyone whether they know it or not think at the margin. And they do this when they compare prices and buy the one that will best benefit their decision. People also respond to incentives, (Principle 4). This is specified by the law of demand, which is when the price of a good goes up then the consumer will buy less of the product and therefore the quantity of the demand will fall. The essential factor to understand is what determines a buyer's demand. And the determinants that will be discussed are the price of the product, the income of the consumer, the price of related goods, taste of the consumer, and the expectation of what may happen. You will see that the behavior of the interviewee will be encouraged by the determinant of demand. To test my theory I will interview Isaac S. Isaac is Twenty-Three years old and works full-time for the USCG, as a Ship boat Electrician. Q: What good do you purchase on a regular basis and why do you buy it?
Isaac said that his favorite beer was Molson, but if there were another beer produced and it tasted the same then he would switch if it were cheaper, this demonstrates a substitute which in Isaacs's case he will take the cheaper beer because it's just like the name brand. Q: What would make you stop buying beer?A: If the price increased enormously I would stop buying beer. A person's behavior is encouraged by the determinant demand. Q: When was the last time you purchased beer, and what kind of beer did you purchase?A. Q: When you buy beer is there something you have to buy with it?A: Yes, I say I usually will buy food or snacks to go along with it. The first of the determinants was the price of the product. Q: If your income dropped would you buy as much beer as you do now?A: No because I wouldn't have the money to buy as much beer. The second determinant discussed was price of related goods. Isaac stated that if the price of the beer were to in increase then he would buy less and this is the same of the law of demand, when the price of a good rises, the quantity of that good is less demanded. The Third principle: Rational people think at the margin was illustrated when Isaac had the choice between Molson and Bud Light beer. Q: If you knew the price of beer were to increase next month, would you buy more beer now?A: I would stock up on beer so I wouldn't have to pay for any beer next month and hope that the next month the price would fall again. The second determinant mentioned was Income. And the last determinant is expectations.
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