Economic Integrated Assignment

By: k-a-h-m-a-n :P on 10:14 PM

Integrated assignment for economics

1)  Five factors of demand

There are many factors that affect demand. Examples of factors of demand is price, level of income, price of related goods, consumers “taste”, and the tendency of consumers predict the price.

 When price of a good increases, then the quantity demanded for that good will decrease assuming ceteris paribus condition. For example, if the price of Tesco products increase, the quantity demanded of it will decrease. This is because consumer is more into cheaper product. They can go for other hypermarket for a cheaper product. 

(Factors below are assuming that price is ceteris paribus.)

Level of income affects demand. If level of income increases, the quantity demanded of the good will increase. For example, if a person’s income increases, the amount of shopping they do will also change because they have more money to buy the same price of goods. Such as , at income level of RM3000, the person able to buy 100 t-shirts with RM30 each. When the person's income increase to RM3300, the person able to buy 110 t-shirts with RM30 each. 

Price of related good can affect demand. For example, butter is a substitute of margarine. When price of the margarine increases, the quantity demanded of butter will increase.

Consumers “taste” can affect demand. Consumers will purchase goods that they prefer rather than ordinary goods. For example, youths would prefer to shop at Tesco rather than Carrefour.

There is a tendency for consumers to predict the price of a good in the future. This also affects demand. For example, if consumers know that the average price of Tesco products will increase tomorrow, consumers will stock up on the products today.

2) Three factors of demand in sustaining green environment

  One factor of demand that can help in sustaining a green environment is price. Tesco Hypermarket’s can reduce the price of environmentally friendly products or they can even conduct promotions for these environmentally friendly products. This will encourage customers to buy environmentally friendly items as they are cheaper and also help the environment even more. This will result in the product becoming a substitute for the products that the customers usually buy. This is because this environmentally friendly product has become an opportunity cost to the consumer. For example, Tesco Hypermarket’s sell recycle bags that are durable for only RM 5. This is to encourage customers to buy their recycle bags to reduce the amount of plastic bag usage. 

Here is an video of Tesco UK promote how to reduce the usage of plastic bag.

Besides that, a factor of demand that can help in sustaining a green environment is level of income. Tesco Hypermarket’s sell environmentally friendly products that are cheap and are durable for the long run. They do this because the level of income of each households varies. Families who have average level of incomes will buy the environmentally products because it is not too costly and is good in quality. This in turn also cater for families that have high level of income. Families that have high level of income will also turn to buy these products because they are opportunity cost of the goods that perform the same function. For example, Tesco sells premium environmentally friendly toilet paper that are cheaper than regular toilet paper. This toilet paper also comes in a larger quantity.

 Lastly, “taste” of a consumer is also a factor of demand that can help in sustaining a green environment. Tesco Hypermarket can conduct campaigns or social awareness plans to try and convince their consumers to buy environmentally friendly products. Although consumers might have different “taste” in buying their favourite products but with Tesco Hypermarket’s action to try and convince their consumer to buy environmentally friendly. The consumers “taste” might change and soon spread to their friends and families. This will also lead them to buy environmentally friendly products. For example, Tesco Hypermarkets launch a project on the 19 March which is called “Green Bag Green Point”. This campaign is to encourage customers to use their own shopping bag. Besides, encouraging their customers to use their own shopping bag, this also reduces carbon emission and reduces the usage of plastic bag. Thus, promoting and encouraging the consumers to change their “taste” to buy environmentally friendly products.

Analysed of changes in price, level of income and price of related goods. All survey questions is conducted with 10 customers

Questions asked in survey for customers

1)    If the average price of products for Tesco Hypermarkets has increased will you still shop here?

2)    If your level of income were to increase will you shop more frequently at Tesco Hypermarkets?

3)    If the price of other Hypermarkets such as Giant or Carrefour were to decrease, would you still shop at Tesco Hypermarkets?

If the average price of products for Tesco Hypermarkets has increased will you still shop here?

Answers for question 1)

If the average price of products for Tesco Hypermarkets has increased will you still shop here?
Yes	No
1) Because although it was expensive, it is still nearby my house	Because there is a Carrefour nearby my house
2) Because the customer service and quality of products there are still better.	Because it is not worth it compared to other Hypermarkets
3) Because I do not go there often. I only go about once every two weeks	Because it does fit into my budget scheme anymore
4)	Because there is a row of shops nearby my house
5)	Because I am very sensitive when it comes to the price of the products I buy
6)	Because I am sure other hypermarkets sell the products that I want at a cheaper price
7)	Because the average price of product for other hypermarkets are cheaper

If your level of income were to increase will you shop more frequently at Tesco Hypermarkets?

Answer for question 2)

    

If your level of income were to increase will you shop more frequently at Tesco Hypermarkets?
Yes	No
Because I would be able to buy more of             my favourite products	Because if I have the extra income. I would save it up for something more important
Because the prices are just irresistible	Because I think I can save my income for the future
Because I do my grocery shopping at Tesco very often	Because I could save up for more important things
Because I wouldn’t need to be so thrifty with my grocery shopping anymore	Because I have more important things to buy if I have the extra income
Because the products there are cheap and good in quality.
Because the it is has many variety of promotions

If the price of other Hypermarkets such as Giant or Carrefour were to decrease, would you still shop at Tesco Hypermarkets?
Yes	No
1) Tesco has better quality and variety of products compared to the others	The prices over there are cheaper.
2) Tesco is more nearer to my house	I want to save as much as possible
3) I have shopped at Tesco for a very long time and I am familiar with the place already	Because there are also more promotions at Giant and Carrefour
4)	I am very cost-conscious
5)	Giant is nearer to my house
6)	Because the price at Carrefour is much more cheaper
7)	Because Carrefour is nearer to my house

Pie chart for question 3