Consumer Behavior and the Demand Curve Essay Example | Topics and Well Written Essays - 1250 words

Consumer Behavior and the Demand Curve - Essay Example This essay projects on the consumer behavior towards these electronic vehicles over the coming years and how it shall cause movements along the demand curve as well as shifts on the demand curve. The movement along the demand curve will be caused by changes in prices of the electric vehicles, either increase or decrease in the prices. The shifts will be caused by preferences of the consumer to buy the vehicles irrespective of the increases and decreases in the vehicles prices, consumers believe that the vehicles will help reduce environmental pollution and the prices of other related vehicles whereby if other vehicles prices increase considerably, then consumers will settle for electric vehicles. The demand curve will shift upwards since consumers are optimistic that the electronic vehicles will serve their purpose and hence prefer to buy them. In addition, the vehicles batteries are expected to be improved making them to last longer than they do at the moment and hence attract more consumers causing the demand curve to shift upwards. For now, people who buy electric vehicles, as Levine puts it, always want to be seen to have class and style. They therefore are highly educated people, successful businesspersons, and those who earn highly in their areas of specialization. These people are few as compared to average people who earn too little to think of buying electric vehicles. There are those who would want to buy the electronic vehicles simply on the grounds that they promote green environment only to find that electronic vehicles costs is beyond their means. Many a consumer is always excited about the electronic vehicles when they hear about them for the first time, but when they are told of price, their interest in those vehicles decreases. Majority of consumers are also concerned with the appearance of the vehicle, their performance and how reliable they are. Given these costs, sales for most electronic vehicles have remained low. For instance, Nissan Volt has recorded very dismal sales performances due to prices the company has attached to them. Terlep acknowledges that Electronic vehicles have elicited a lot of excitement among the consumers who think that electronic vehicles will be the norm of the day. However, according to analysts, this may not come into fruition any time sooner as it is only estimated that electronic vehicles will amount to 7.3% of all the vehicles sales by around 2020. Currently, there are only 2.2 percent of electronic vehicles in circulation. Projections indicated that fully electric cars will be about 10 percent of all the vehicles by 2020. Recent estimates show that electric and hybrid vehicles are 5.2 million as compared to 70.9 million sales that had been predicted earlier. Consumer choice It is a microeconomics theory that shows the preferences that make people consume goods and services to certain expenditure and this is what eventually leads to consumer demand curves. Ingram explains that the theory analyses how consumers are likely to attain equilibrium given their preferences and the level of expenditure they are in so that they can maximize utility under the budget constraints they could be in. Preferences are what the consumers desire to have with their level of income and hence make choices depending on the income allocated for goods and services.