General Electric

Topics: PepsiCo, Supply and demand, Coca-Cola Pages: 4 (848 words) Published: March 20, 2013
Factors affecting Demand of Pepsi( Cold drink)

(1)Changes in the Price
(2)Changes in consumers’ Income spent on goods and services  
(3)Changes in the Tastes/Preferences of consumers for goods/services  
(4)Changes in the Prices of related goods and services: Substitutes and Complements

 5) changes in interest rates and the general availability of credit. Many households finance consumption through borrowing. If interest rates rise, demand contracts for many goods and services; particularly housing.  

6) Natural disasters (storms, hurricanes, earthquakes, tornadoes, floods etc)  
7) Advertising can have a market effect on demand. Indeed, producers of PEPSI that are close substitutes generally spend large amounts on advertising, reminding consumers that their product is ''better'' than the opposition's product. (Whether or not this is reality true, of course is another matter).   

8) Seasonal changes. For example, demand for Cold drinks rises in warmer weather, and falls in the colder months of the year.

If price only changes, the demand curve for a good or service will not shift. Instead, there will be a movement along the demand curve. If price rises, demand will contract; less will be purchased in a given period of time. If price falls, demand will expand, and more will be bought in a given period of time.

The demand curve will shift to the left or right, if other factors, other from price, change.

Factors Affecting Supply Of a Product
* Expectation of future price
* When producers expect higher prices in the future commodities, the tendency is to keep their goods and release them when the price rises. *  Change in the price of related goods
* Changes in the price of goods have a significant effect in the supply of such goods. * Government subsidies
* Subsidies or the financial aids/assistance given by the government reduces cost of production which encourages more supply....
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