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供應 Demand

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A. Consider the demand for a product defined to be “soda pop.”
1. What would be included in the definition of this product? All of the different brands of carbonated soft drinks produced by the various bottlers, including Coke Classic, 7 UP, Dr. Pepper, Mountain Dew, Dad’s Root Beer, Ginger Ale, etc. 2. What geographic area would the market area typically considered be? The geographic area is the region within which the product is bought and sold and the area within which the price and quantity of the product bought and sold are being determined. It is usually considered to be the entire U.S. 3. How would quantity demanded and the price of this product be defined? The quantity demanded is defined as the total number of gallons of all brands of soft drinks that all the households in the market area are willing and able to purchase during some period of time, c.f., week, at some (average) price of soda pop. The price of soda pop, which is what would be on the vertical axis of a demand curve diagram, is the average price of all the different brands produced by all the different bottlers for say a 12 ou. serving. The price of the product would be thought of as the average price of a 12 ou. serving for all the brands included in the definition of the product. 4. How is the demand for this product defined? The demand for soda pop is the relationship between all the possible (average) prices of soda pop and the corresponding amount that all households are willing and able to purchase during some period of time, ceteris paribus (which means none of the demand determinants changing). 5. Explain why the demand curve is downward sloping. Be sure to consider both of the effects (substitution effect, number of buyers) that a change in price has on quantity demanded. What theory or hypothesis explains the downward slope? The demand

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