Date post: | 06-May-2015 |
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CONSUMER AFFAIRS
Factors that Influence the Price of Goods and Services
Presented by Mr. D. Gooden
Different countries govern differently…prices of goods are the same
A market is a place where people (vendors) take their goods and sell it to people. It is a physical
place where people buy and sell eg. May Pen Market
Price Formation of GoodsThe price of goods and services in different countries is dependent of
the type of market that exists.
A market can also be seen as any environmentwhere trading takes place eg. over the internet, at a backyard sale or between two students on the school compound.
Price Formation of Goods
Price Formation of GoodsThe price of goods and services in different countries is also dependent on the demand and supply of the goods
and services.
What is demand?
Demand refers to how much (quantity) of a product or service is
desired by buyers. The quantity demanded is the amount of a product people are willing to buy at a certain
price.
Price Formation of GoodsThe price of goods and services in different countries is also dependent on the demand and supply of the goods
and services.
What is supply?
represents how much the market can offer. The quantity supplied refers to
the amount of a certain good producers are willing to supply when
receiving a certain price
Some of factors that affect the demand for goods and services
• Changes in consumers’ Income • Changes in the tastes/preferences of consumers
for goods/services
• Changes in the prices of related goods and services: (Substitutes and Complements)
• Natural disasters (storms, hurricanes, earthquakes, tornadoes, floods etc)
Some of factors that affect the demand for goods and services
• Advertising or Commercial ads
• Seasonality (Christmas, Easter, Valentines Day etc)
• Changes in government fiscal policy (spending and taxation) and monetary policy (interest rate etc)
Some of factors that affect the supply for goods and services
• Changes in the Price of a good or service • The Costs of factor inputs of firms (labor, capital
etc) • The # of business firms in an industry • Changes in Technology (or the State of the Art)
of business firms
• Changes in the Prices of related goods and services
Some of factors that affect the supply for goods and services
• Natural Disasters • Government fiscal and monetary policies • The rate of growth of the Population • Scientific Discoveries (medical, inventions,
chemicals etc) • Changes in the Tastes/Preferences of
consumers for goods/services
THE END