Consumer Expectations and Consumer Taste Assignment Help

Assignment Help: >> Determination of the Demand for a commodity - Consumer Expectations and Consumer Taste

Consumer Taste/Preference:

Any change in consumer taste or preference causes demand to change. Increased taste or preference for a particular good causes demand to increase whilst declining taste or preference causes demand to fall, ceteris paribus. Taste or preference for goods and services are influenced by advertisement, fashion and sales promotions.

Consumer Expectations:

The decision to buy commodity today is influenced by the expected future price of the commodity and expected change in consumer income. If a consumer anticipates the price of a commodity to increase in future, today's demand for the commodity will increase but if the consumer anticipates a fall in future price, then today's demand for the commodity will fall. Similarly, an expected consumer income increase may cause current demand for a normal commodity to increase and vice versa.

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