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Describe and explain the likely causes of the rise in the demand for Champagne in recent years.
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Describe and explain the likely causes of the rise in the demand for Champagne in recent years. Tim Hoffmann Economics 11 IB HL 23/09/03 The rise in demand for champagne recently can be set down to certain factors. The six determinants that will have affected the rise in demand for champagne over the last few years include: Rise in income, rise in the price of substitutes, fall in price of complements, change in tastes (in favour of champagne), increase in population and an increase in price expected. This can be broken down. Firstly, a rise in income means that people in general will have more available spending money, which can then be allocated to champagne (usually a normal good). If it is indeed a normal good, the usual rules will apply where an increase in Y (income) will mean an increase in demand. The second factor to consider is a rise in the...
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