Supply And Demand Of Coca Cola

Law of Demand: Downward slope, and inverse relation of price and quantity demand. When price of oranges goes up, the quantity demand will decrease, because of higher price, and substitutes.

According to the law of demand, if a.product price increases, quantity demanded will decrease.b.consumer income increases, quantity demanded will increase.c.product price increases, quantity demanded will increase.d.consumer income increases, quantity demanded will decrease.e.supply increases, demand will increase. ANS

This paper will define terms such as economics, micro economics, the law of supply, the law of demand and the factors which lead to a change in supply and demand. This paper will also summarize the article and

In this task I am going to explain demand and supply in details. Demand is how much people wants from a certain product. While supply is how much of something people have. Demand and supply involve in everything in our life, for example if human being feels that they need a certain product they will start to produce it to meet their demand. Demand and supply curves always have an inverse relation which means if the demand increase the supple will decrease and vice versa.

According to David Cravens and others “Target market is a group of existing or potential customers within a specific product market towards which an organisation directs its marketing efforts”. Coca cola company follow Total market approach; therefore, company develops a single marketing mix and directs it at the whole market for their products.

The political situation of a country affects its economic settings and economic environment affect the business performances. Coca-Cola sales are impacted by a set of economic factors that beyond are beyond the company’s control. These factors include the level of economic growth in the country and in the industry, tax rates and currency exchange rates, interest rates, labor costs and others. The global economic and financial crisis of 2007 – 2009 is a relevant example of an economic factor that greatly impacted the majority of businesses around the globe. However, the crisis has impacted Coca-Cola to a lesser extent compared to many other businesses. Its’ operating margin remained at industry-front 22% despite the crisis, although dividend yield was reduced to 2.6 % Quarts. (Timmons, H. (2014). Economic factors relate to goods, services, and money. Despite directly affecting businesses, these variables refer to financial state of the economy on a greater level –whether it be local or global, inflation increases cost of production. Consequently, Coca-Cola had to face the uncontrollable problem of increasing their pricing. With this increase they risk losing customers who cannot afford their products because it is a desired product not a necessity. Due to inflation in 11 years the price of an identical bottle of Coca Cola has doubled in price. Alternatively, Coca Cola could be forced to lower their prices to facilitate an increase in consumption

Supply and demand regulate the amount of each good produced and the price at which it is sold. It is the conduct of individuals as they work together with one another in aggressive markets. “A market is a group of buyers and sellers of a particular good or service. The buyers, as a group, determine the demand for the product, and the sellers, as a group,

As resources, which are used in the production, of product or service, are limited and have cost; therefore, it is essential for the producer to determine it production. It is also to be recognized that there are various types, of resources and different ratios, of these resources are used to produce optimal quantity, as per budget restraints.

Law of Demand and its relationship to prices and consumer is defined as the following:

In economics the law of demand states that “all else equal, as the price of a product increases, a lower

The principle of supply and demand is a fundamental principle when you govern a economy. It is described as where supply increases the price and will tend to drop, and demand increases the price and will tend to increase.

A particular good or service that a customer will want to purchase at a given price. When the price decreases customer will want to buy more, but when the price increase customer will not willing to consume a large amount. Demand for a good or service are determined by many different factors other than price. For example the price of substitute goods and complementary goods. As the graph illustrate that the price at ￡0.50 there are only 100 quantity demand but if the price decrease to￡0.20 the quantity demand is 400. (Horner, D., & Stoddard, S. (2015))

The strategy for setting a product’s price often has to be changed when the product is part of a product mix. In this case, the firm looks for a set of prices that maximizes its profits on the total product mix. Pricing is difficult because the various products have related demand and costs and face different degrees of competition.

The following graph demonstrate the demand curve of how many items of a product or service a consumer would like to purchase at different prices. Now by having the product at a lower price, the more a consumer is likely to buy. For that same reason it can be concluded that the price is one major factor of the product demand.

Supply and demand is perhaps one of the most fundamental concepts of economics and it is the backbone of a market economy. 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; the relationship between price and quantity demanded is known as the demand relationship. 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. The correlation between price and how much of a good or service is supplied to the market is known as the supply relationship. Price, therefore, is a reflection of supply and demand.