What is the shock of demand?

Shock demand is an economic term concerning sudden changes in demand for a specific purchase of a product or real estate. These events may arise from a number of factors. They may include mismatch between the level of public desire for versus available offers, tax law changes and available financing if the cost of goods exceeds the capacity of most people to buy cash item. Another potential triggering of the demand of demand may be media coverage that stimulates the desire for public for the item.

The term 'demand level' describes the correlation between the available product and the number of consumers who want this product have capacity and will soon buy it. All three factors usually participate in the start of the demand. For example, millions of people may want to buy a new technological gadget and may also have the ability to buy an item. If most are waiting for a purchase in a certain season, such as the main Holiday, there is likely to shock in demand. Without added factor of the Donor SeasonThe demand would probably spread more evenly for some time.

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factors that cause the shock of demand are very different and are not always predictable, as in the case of a fighter. For example, if a popular new toy reins the attention of consumers and the desire to own the product becomes intensive, the demand for the product will increase sharply and will suddenly rise in the demand curve. When the demand is brought against the offer on a two -dimensional chart, it creates a line that can be straight or curved, which is the origin of the term 'demand curve'.

The main cause of the demand curve is if the planned production of the item does not match the public demand for a certain period of time. Too little item production can result in a positive shock of demand, while overproduction can result in a negative core to shock. Both are problems for manufacturers. The first case usually results in a missed opportunity for saleEven the product when consumer desires are strong. Second circumstances, manufacturers must pay more than expected to save or dispose of unsold stocks.

Tax law changes can be used to handle production levels, especially if the demand is negative. For example, if too many houses are built in a speculative madness of real estate, as this happened during the US mortgage crisis in the middle to the end of 2000, lawmakers can adopt the laws that provide tax incentives to remedy the imbalance. Luxury items can be taxed at higher rates during a prosperous period, as increasing taxes usually do not affect sales at these times. Media coverage can also have a strong impact on demand on demand, as consumers receive feedback from media stories and often incorporate this information into a purchase decision.