Demand Curve for A-Phone

781 Words Jan 26th, 2018 3 Pages
Due to the similarity in specifications between the A-Phone and the Pomegranate the only hope that the A-Phone has when it comes to increase its demand is to reduce its price.
Price elasticity of demand refers to how a change in price of a commodity ends up affecting the quantity demanded of that commodity. Income is one of the factors that influence price elasticity of demand. An overall increase in income means that the consumers can afford to purchase the A-Phone at a relatively high price which means that the price elasticity of demand will be inelastic i.e. the demand will not be influenced very much by the changes in price. Thus an overall increase in income may influence an increase in the price of the A-Phone.
On the other hand the quantity demanded will also increase. Regardless of the price and assuming that the phone meets the need of its market properly the increase in income would mean an increase in disposable income which can be used to purchase the more phones of the A-Phone brand. The graph will thus show an increase in demand with a constant price regardless of how high or low the price may be because the market will be comfortable to purchase the A-phone at any price.
Health concerns directed towards a particular product may affect the price, the quantity demanded and the demand curve adversely. The quantity demanded will reduce because no one will want to buy the phone anymore due to its adverse…

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