Verified Document

Law Of Demand The Laws Of Supply Essay

Related Topics:

Law of Demand The laws of supply and demand dictate how the market functions within an economic society. These laws also affect how commodity pricing is determined and how it may fluctuate depending on the amount of readily available products or services and the intensity of demand for said products and services.

The law of demand stipulates that "other things held constant, as the price of a good increases, the quantity demanded will fall" (Supply and Demand, n.d.). There are several factors that can influence the demand of a commodity including income, the price of related products, consumer tastes and preferences, and expectations. Income helps to determine the quality of a commodity being sold. For example, as an individual's income increases, then it is reasonable to assume that this individual has an increased ability to purchase more goods. If the demand of a good increases proportionately with an income increase, then this is called a "normal good," however, if the demand of a good decreases when an income is increased then the good...

The price of related goods also affect demand. These related goods can be used to as substitutes for the goods or services offered, or they can be complementary products that help to elevate the use of the original good. Tastes and preferences also help to determine demand, however consumers' personal tastes are not likely to change in the short-term; tastes and preferences also help to determine how related goods are purchased in conjunction with the original good. Expectations also help to determine how demand is calculated. For example, if a good's price is expected to rise in the future, then it is likely that a present increase in demand may occur in an attempt to offset future price disparities (Supply and Demand, n.d.).
In order to calculate the demand of a certain commodity, demand curves may be analyzed. Demand curves look to "isolate the relationship between quantity demanded and the price of the product, while hold all other influences constant" (Supply and Demand, n.d.).…

Sources used in this document:
References

Supply and Demand. (n.d.). Basic Economics. Accessed 15 November 2011 from, http://www.basiceconomics.info/supply-and-demand.php
Cite this Document:
Copy Bibliography Citation

Related Documents

Application of Managerial Economics for Demand & Supply
Words: 1332 Length: 4 Document Type: Case Study

Managerial Economics: The Demand & Supply Model Managerial economics is the application of the economic theory using quantitative and statistical tools to analyze how organizations can achieve their aims and objectives. In other words, the managerial economics use the decision science analysis using the econometrics and microeconomic theories to analyze how organizations can achieve their aims and objectives efficiently by maximizing their profits through the combination of inputs such as capital,

Effect of Plain Packaging on the Cigarette Market Demand and Supply...
Words: 1226 Length: 4 Document Type: Research Paper

Plain Packaging on the Cigarette Market Demand and Supply in Australia The Australian cigarette market is reported to be a "subset of the global industry." (Carter, 2003) There are three companies operating in Australia including: (1) British American Tobacco Australia (BATA); (2) Philip Morris International (Australia) PMA and (3) Imperial Tobacco Australia (ITA) all whom are wholly owned subsidiaries of their overseas parent. While the Australian tobacco market is a

Supply and Demand Curve
Words: 1383 Length: 4 Document Type: Essay

Supply and Demand Curve: Shifts and Movements Demand is, in basic terms, that quantity of a certain product/good that consumers are able and willing to buy/purchase at the prevailing price (Hirschey, 2008). A product's market demand function relates its aggregate quantity demanded to the various parameters, including price, that influence the said quantity (Hirschey, 2008). The demand curve is an expression of "the relation between the price charged for a product

Supply Demand Simulation Macro and Microeconomic Principles
Words: 903 Length: 3 Document Type: Essay

Supply Demand Simulation Macro and Microeconomic Principles From the simulation, the two major microeconomic principles are supply and demand. The simulation majorly focuses on the supply and demand of rental properties in Atlantis. In addition, the influences on supply and demand form the major topic discussed in the simulation. The macroeconomic factors clearly stated in the simulation are changes in the population trend, choosing to rent or buy apartments and factors that

Supply Chain Management in Fmcg Sector Fast
Words: 4046 Length: 10 Document Type: Term Paper

Supply chain management in FMCG sector Fast Moving Consumer Goods (FMCG) Managing supply of FMCGs Demand and Supply Distribution Channel Traditional channel of FMCGs distribution National Vs Global Presence Products and Services Supply chain opportunities Usage of Supply Chain Management Business development Business performance Cost reduction Revenue Increase Inventory management Overall Business Performance Competitive advantage Future trends Issues in global supply chain management: FMCG sector Multi-channel Supply Chain Management Individual Tagging The FMCG sector is represented as manufacturers and distributors of packaged products. They are also coupled with mega retail brands

Supply Chain Management Hypothesis Defined Concepts of
Words: 24788 Length: 80 Document Type: Thesis

Supply Chain Management Hypothesis defined Concepts of SCM and the evolution to its present day form Critical factors that affect SCM Trust Information sharing and Knowledge management Culture and Belief -- impact on SCM Global environment and Supply Chain management "Social" and "soft" parameter required for SCM Uncertainties This chapter aims to give an outline and scope of the study that will be undertaken in this work. The study lays out the issues faced by manufacturing organizations when it comes

Sign Up for Unlimited Study Help

Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.

Get Started Now