Demand of Pepsi

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Demand of Pepsi Julliet Indiana Wesleyan University February 21, 2012 Abstract Pepsi is a popular cola brand that is available for purchase at many convenient stores, grocery stores, department store, vending machines and restaurants. It is in an Oligopoly industry. One market place can have a stronger market share than another market place. There are several determinants of demand which can influence the shift in the demand curve left or right or decrease or increase in the demand. Demand of Pepsi Pepsi cola is a cola/soda-pop beverage brand from PepsiCo. PepisCo is known as an Oligopolistic industry. There aren’t that many firms the market that Pepsi cola is in. Pepsi cola first made a public appearance in the 1890s as…show more content…
The example of price was relevant to Pepsi Company in 1936 when they decided to decrease the price from 10 cent to 5 cent. When the price of the 12-ounce bottles price dropped, the demand of the product increased. Price of other goods or in Pepsi’s case, substitute goods, can also have an effect of the price of Pepsi cola. The prices of substitute goods can cause an increase on demand. Coca-Cola is a substitute good to Pepsi. So if Coca-Cola decided to raise prices, then the demand of Pepsi will raise and vice versa. This may be a reason why consumers see the same price in Pepsi cola and Coca-Cola. Changes in income of the consumer can increase or decrease the demand of Pepsi. If a consumer income decreases, then the consumer can either buy whatever cola product is on sale or at a cheaper price, or stop buying cola all in general. If the income of a consumer increases, then it is possible that the consumer can purchase any type of size Pepsi cola of their liking; rather it’s a 20-ounce bottle at $1.49 or a 2 liter at $1.25. “Expectations about future prices also play a role in influencing current demand. If consumers expect prices to be lower in the future, they may have less current demand then if they did not have those expectations” (Farnham, 2010, p. 22). This can also be true if a consumer feels that Pepsi cola won’t be at the low price it’s at now, so the consumer stocks up on Pepsi cola at the current time pushing the demand curve shift to the
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