Johnny Ch Lok

Developed Countries Future New Technology Industry Development Johnny Ch Lok

?Non price factors influences automobiles buyers' needs or desiresThe market for automobiles has always been a large part of the countries GDP. Not only that, it also has been a big part of the International Trade through imports and exports. Even though it is a huge firm, there are many automobile companies and each company has its own contribution to the automobile market. This has created competition in the market. That's why, the general price of automobiles move together up or down. The factors that affect the general price of automobiles. Of course, these factors are non-price determinants of demand and non-price determinants of supply. I will also discuss the price elasticities for the market of automobiles. Factors affecting demand and supplyAutomobiles are considered luxury goods with many years for duration to last. Therefore, the demand for automobiles is positively related with the economic growth of the countries. Whenever there is extra income, people spend it on luxury goods including cars. And to provide these people with automobiles, firms produce cars. Of course, there are important factors affecting the demand and supply. These factors are the non-price determinants of demand and supply. The demand view to car market1. Weather factor influences car buyer demandFirst of all, the tastes of people should be explained. With so many options available in the car market, consumers began demanding cars with more features two decades ago. For example, from 1990 to 2007, the demand for air conditioning in automobiles increased rapidly . This caused demand for automobiles without air-conditioning to decline whereas for automobiles with air-conditioning to increase. As of late, however, people are becoming more aware of global warming and that the automobiles is one of the causes. Although their number is not great, still there are consumers using canceling their purchase in order to contribute to solve global warming. All these changes in the consumer tastes affect the demand for automobiles. And when the demand is law, the price of cars falls down until the supply restores new equilibrium price.2. The price of substitutes factor influences car buyer demandSecondly, the price of substitutes must be explained. The number one substitute for automobiles, or rather the usage of automobiles, is the public transportations. If the ticket price is noticeably low, many people may choose to use public transportations. This is especially true for crowded cities and for millions of students around the world. Consequently, this will affect the demand for automobiles negatively. As followed, a fall in demand will cause a fall in price. It is important to note here that because of the global warming, governments are taking necessary steps to encourage people to use public transportations rather than their individual vehicles. Thus, it is more probable that the effect by the price of substitutes will be high.3. The complementary goods to automobiles factor influence car buyer demandNext, the complementary goods to automobiles must be discussed. The gasoline is the famous complementary good to automobiles. If the price of gasoline rises, as it was in 2003, the demand for cars will fall noticeably. Reversely, if the price of gasoline falls, as it used to be many years ago, the demand for automobiles rises. But according to the US Department of Energy, the price of oil (which is used to make gasoline) has been always rising (with very small exceptions). It means that the effect by the complementary goods will be negative on the demand for automobiles in the future, add to that the movement by the 'global-warming-preventers'.