Question

What are the two or three major determinants of demand for Amazon and Amazon P Memberships?

What are the relevant controllable and uncontrollable factors?

Have the most important factors changed at all in recent years?

Has anyone estimated price elasticity of demand of Amazon membership? If not, see if you can collect some price and quantity points and perform your own analysis (holding all else besides price and quantity constant). If this isn’t possible, describe which of the major demand shifters are the most dominant—tell us which direction demand shifts and how far.

Answer 1

In economics, demand is the quantity of goods that is demanded kr needed by the people at a particular price on a particular time period. Demand of goods and services is called quantity demanded.

Determinants of demand refers to those factors that affect the demand of given goods and services.

In this case of Amazon and Amazing prime membership major determinants of demand are:

• Income of consumer.
• Price if Amazon goods and it's membership fees.
• Preferences of consumers.
• Changes in the price of competitors' goods and membership fees.

All the factors are uncontrollable except price of Amazon's goods and membership fees.

All the factors are flexible and changes according to changing business and economic environment of the organization.

Major demand shifters that are most dominant:

• Preferences of consumers: if consumer prefer goods and services of Amazon then demand curve of Amazon will shift to the right and vice versa.
• Prices of the competition: if rivals of Amazon offers same goods and services to customer at lower prices then customers will shift to the competitor and demand curve of Amazon will shift to the left and vice versa.

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