Question

.Your boss has asked you to describe how the demand for an over-the-counter sinus medication would change in the following situations. Assuming the price does not change, forecast whether the sales volume will go up, remain constant, or go down.

1. The local population increases.
2. A wet spring leads to a bumper crop of ragweed.
3. Factory closings lead to a drop in the area’s average income.
4. A competing product with a different formula is found to be unsafe.
5. A research study is published showing that the medication causes severe dizziness. 

6. The price of another sinus medication drops.

Answer 1

If the local population increases the demand for an over the counter sinus medication will increase. Hence, the sale will go up.

A wet spring leads to a bumper crop of ragweed. Ragweed is a medicinal plant. This will lead not Increase the demand. But this will increase the supply of over the counter sinus medication. Hence the sales volume will go up.

If areas average income decreases the demand for over the counter sinus medication will decrease. Therefore the sales volume will go down.

The competing product with a different formula is found to be unsafe. This will lead to a decrease in the demand for that product and will increase the demand for our over-the-counter sinus medication. Hence the sales volume will go up.

Research study that shows that the medication causes severe dizziness will lead to a decrease in in demand of over the counter sinus medication. This will reduce the sales volume.

If price of another sinus medication drops, then the demand for power over the counter sinus medication will decrease. This will lead to a decrease in the sales volume.