2007-06-21 11:55:41 · 5 answers · asked by Norma N 1 in Business & Finance ➔ Other - Business & Finance
The demand for tea absolutely "does not go up." The principles of demand say that price will never affect demand. Even if the price of tea is much lower than coffee. What "is" affected is the "quantity of demand." The quantity of coffee purchased would decrease and the quantity demanded of tea would likely increase.
That's economics.
In response to the person below me...
The first thing you learn in macroeconomics is that price will never affect demand.....period. Only quantity of demand can be affected.....or maybe all the professors and authors are wrong....
2007-06-21 12:15:21 · answer #1 · answered by Squeeze Play 3 · 0⤊ 0⤋
Must make additional assumptions to
address the market demand case.
[ 1] Are coffee and Tea perfect substitute for customer?
IE customer gets same satisfaction for Tea or coffee at current price level.
THEN
with price increase in coffee Customer will get less Value/satisfaction.
Customer might spend less for coffee but be partially satisfied. [but may not want to switch]
If Coffee or Tea are identical substitute then
Customer might switch to Tea THUS increasing demand for TEA.
Stock more Tea and put in prominent place for ease of selection. Hence more Tea business.
Long term
Suggest Monitor Customer buying habits over a period of time to understand need and respond based on the choices interest.
2007-06-21 13:07:17 · answer #2 · answered by mashahs 1 · 0⤊ 0⤋
Demand for tea goes up as long as the price for tea doesn't rise right along with that for coffee.
2007-06-21 11:58:22 · answer #3 · answered by Judy 7 · 0⤊ 0⤋
the market for tea rises because coffee is more expensive so people will search for a cheaper alternative (tea)
2007-06-21 12:05:20 · answer #4 · answered by billybutsky 4 · 0⤊ 0⤋
Demand goes up.
2007-06-21 11:58:20 · answer #5 · answered by npwinder 3 · 0⤊ 0⤋