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Determinant of Demand for Alcohol: PDF

   

Added on  2021-06-16

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Running head: ECONOMICS ASSIGNMENTEconomics AssignmentName of the studentName of the universityAuthor Note
Determinant of Demand for Alcohol: PDF_1
1ECONOMICS ASSIGNMENTTable of ContentsIntroduction:...............................................................................................................................2Determinant of demand for alcohol:..........................................................................................2Supply of alcohol:......................................................................................................................5References:.................................................................................................................................8
Determinant of Demand for Alcohol: PDF_2
2ECONOMICS ASSIGNMENTIntroduction: The alcohol beverage industry of Australia has contributed significant amount to thecountry’s National income by generating employment opportunity and the tax revenue of thestate. The demand for and supply of alcohol of this concerned country can be measured byconsidering two chief form of beverages, which are beer and wine (Buyucek, Knox andRundle-Thiele 2018). Hence, the chief intention of this report is to analyse the ability ofsupply side of alcohol to create and control demand for this product in market while both sidecan get advantage. Moreover, these two sides influence the government to influencegovernmental regulations for this specified market. Determinant of demand for alcohol:According to the law of demand, price of a commodity has a negative relationshipwith its amount that can be demanded. However, for establishing this relation, other demandinfluencing factors are considered as fixed. Those factors are price of related commodities,income, tastes and preferences of the consumer and so on. If one of the factor changes,remaining the price at a same level, then the demand curve can be shifted to the right or leftaccordingly. For each factor, those demand-influencing factors can be changed.Consequently, the factors that can influence the demand for alcohol can also be taken underconsideration. Hence, for this concerned product, those demand-influencing factors are itsown price, income fluctuations of the customers, level of wine and beer stock and exchangerate (Liu et al. 2018). Those factors can be described as follows.Price of alcohol has a negative relation with its quantity demanded. Hence, thedemand curve slopes downward. However, in this case, price elasticity needs to be discussed.For alcohol products, inelastic demand curve with negative slope can be found. This impliesthis implies that an increase price cannot reduce the demand for this product by large extend.The following curve can represent this situation precisely.
Determinant of Demand for Alcohol: PDF_3

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