China is a biggest manufacturers of fashion clothing apparel in the world. Get the data. They export their products worldwide, mainly to developing countries such as Africa (sub-Saharian), some Asian countries, and Latin America. Some of the products are using China brands such as GW… but some others are plainly fake products such as Baby GAP, NEXT, Crocodile, Burberry, and others.
These products even though are fake, gain their popularity because of their cheap price and also …
Using the Managerial Economics theories such as Demand, Inferior Good
We are going to analyze why this economic phenomenon happened.
Theories and Analysis
Demand ...view middle of the document...
That is, since the price of fake brand is lower the consumers in developing countries are strongly attracted and aim to demand more quantities of these products. It means that if the fake brands increase the price, according to the law of demand the quantity of fake product demanded will decrease.
Number of consumers in the market
One of the determinants of demand is Number of consumer in the market. According statistics of UNFP developing countries has registered increase in demographic levels during the last years. However this demographic boom is not accompanied by relative increase in human development index, which means that people in developing country has low purchasing power. As the consequence of that, they prefer to buy products at lowest price possible and fake products are in highlighted position.
Price of related good
When consumer’s income are low, they will look for the price of related goods and compare them with cheaper product. In this case, consumer will choose the substitute which is the fake brands over the original brand.
Income of consumers play...