Demand Function

The demand function defines the parameters that define demand of a certain good:

$Q_{d}$ = $f(P_{0},P_{S},P_{C},A_{a},A_{b},...,A_{z},Y_{d},W,T,C,E,POP)$

The following factors determine demand:

• The Own Price of the good itself ( $P_{0}$ )
• The price of Substitute Goods ($P_{S}$)
• The price of Complementary Goods ($P_{C}$)
• The level of advertising expenditure $A$ on the product in question as well of their complementary and substitute goods (denoted $A_{a}$, $A_{b}$ and $A_{c}$
• The level and distribution of consumers disposable incomes $Y_{d}$, i.e. income after tax and benefits
• Wealth effects $W$ cause by stock market booms.
• Changes in consumers tastes and preferences $T$
• The cost and availability of Credit $C$
• Consumers expectations concerning future price rises and availability oif the product $E$
• Changes in population ($POP$)