Essay On Supply And Demand

This essay is on supply and demand and how it affects real world situations before I tell you some situations you have to know what supply and demand really is. One of the principal sources of growth in any economy is identified by the supply and demand in the market. It is also common to see graphs which contain the supply and demand curve. Demand refers to the desire, willingness, and ability to buy a good or a service. There is a law called “The Law of Demand” which is where people are normally more able to buy less of a product if a price is high and more if the price is low. There are three factors needed for demand to exist. The first factor is that a consumer must want a good or service. The second factor is that a consumer has to be willing to buy the good or service. Last, a consumer must have the resources available to buy it.

There are factors that affect demand. Such as changes in the number of consumers; meaning the more consumers

The first one is cost of production- cause if the cost of any factor of production decreases, the quantity that producers are able to supply at a given price increases. Second is changes in government policy, as in government spending and taxation influence employment and household income, which dictates consumer spending and investment. Third one is changes in the numbers of producers increased demand to increased supply, decreased demand so it will decrease supply.

There is also two terms you need to know about supply elasticity, one is if supply is elastic, a change in the price will cause a change in the number of items produced. The other is inelastic, a change in the price will not cause a change in the number of items produced.

Now I will provide examples of how the concept of this works among different companies and products. Rumors have it that Apple set out a goal to sell a certain amount and they did not meet their goal and did this with both the iPad and