Speaker's notes
Determinants of demand
? No. and price of complementary goods ? these are goods which are consumed together such as cars and petrol. If the price of petrol is too high, it may affect demand for cars in general
? Distribution of income ? in the more wealthy areas of the country, particular products may be on more demand
Specifically affecting High Street Optician firms:
? No. and price of substitute goods ? if a substitute or alternative good (contact lenses) is cheaper, people may switch to it, decreasing demand for that product. (Also if spectacles were being sold cheaper by on-line opticians, consumers may switch to it too)
? Expectations of future price changes ? E.g. when people expected fuel prices to soar up, they started to buy a lot in order to stock up. If people expected the prices of spectacles to increase, they wouldn't stock up, they would consider buying a new pair now rather than later, or have an eye test done now rather than later.
? Income ? If people's income were to increase it could increase demand for designer label spectacles, and visa versa if it decreases.
? Tastes ? For a while, the various colours of contact lenses were part of the fashion, increasing demand for them, and possibly decreasing demand for spectacles.
Determinants of Supply
? Cost of production ? if the cost to produce the products is high, less profit will be made, and therefore firms may cut back on production.
? Profitability of Alternative Goods ? If an alternative good (contact lenses) becomes more profitable to supply, the producers will switch to it.
? Exp ...