HL Economics

DRP Senior Spending Lifts: Extended Response Questions

1. Explain which non-price determinant of demand is affecting the market.
With the increase in the market for aged population, the tastes and preferences or the demanders interests into consuming the goods and services is affected. The aging population of Japan is gradually increasing which change the tastes and preferences of the demanding population. WIth this change in the age of the population, some firms take advantages by creating products and services that mainly focuses on the benefits for elder people. A majority of the aged people use their money on home care places where people could take care of them, which increases the governments income. Also because of the increase in free time these aged people have, the demand for traveling services have increased which is very beneficial for the travel agencies.

2. Evaluate the economic possibilities of Japan’s industries/firms as the population ages.
The economic possibilities of the Japan’s industries and firms could be beneficial as the population ages. As the population still has a “steady pension incomes and lots of free time”, this helps the economy of Japan. Especially with the more use of technology by the aged people to consume products/services, because of the lack of energy to move from place to place, firms are still benefiting from this factor. The elder people tend to stay at homes and it has shown in the article that companies have made a higher income through technological services, where they supply their products and services. As other industries watch these firms benefiting with the technology, they may start their sales by technology as well.
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