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ACCA Applied Knowledge · Business and Technology · Social and demographic factors

A retailer of mobility aids notes that the proportion of people aged over 70 in its home market is rising steadily because of longer life expectancy and falling birth rates. What is the most likely implication for the retailer?

Demand for mobility aids is likely to rise, which is an opportunity. A growing share of older people enlarges the retailer's target market, and older consumers typically spend more on health and mobility products, not less.

  1. ADemand for its products is likely to increase, creating a market opportunityCorrect
  2. BDemand will fall because older people spend less on health-related goods
  3. CThe change is irrelevant because demographics only affect labour supply
  4. DThe change is a legal threat requiring compliance action

Explanation

An ageing population increases the size of the target segment for mobility aids, which is an opportunity. Option B is wrong because spending on health-related goods usually rises with age. Demographics also affect demand, not only labour supply.

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