Supply and Demand
Market demand is best defined as each consumer's demand for a particular product, or each firm's demand for a particular factor. The law of demand specifies that 'the amount demanded vary inversely with price'. An increase in price results in a decrease in demands. This is known as contraction in demand (or a decrease in the quantity demanded). Conversely, if the price falls, then there is an expansion in demand (or an increase in the quantity demanded).Some conditions result in a change of demands. Possible reasons for increase in demand; increased income levels, higher price of substitutes, expected future price rises, changes in fashion, preference and taste, or increase in population. Possible reasons for a decrease in demand; decreased income
levels, lower price of substitute, expected future price falls, changes in fashion, preference and taste, or decrease in population. There are many factors that lead to the change of supply. Factors leading to an increase in supply may include; improvement in technology, fall in the cost of factors of production, increase in availability of the factors of production, more favorable seasonal conditions, or fall in the cost of other goods resulting in them being less profitable to produce and resources being shifted to production of good in question as it is more profitable. Factors leading to this decrease in supply may include; increase in the cost of factors of production, decrease in availability of the factors of production, less favorable seaso
Some common words found in the essay are:
Market Supply, , factors production, price falls, production favorable seasonal, availability factors production, produce resources shifted, factors production favorable, cost factors production, changes fashion, increase cost, preference taste, production question, resources shifted, fashion preference, shifted production, income levels,
Approximate Word count = 507
Approximate Pages = 2 (250 words per page double spaced)
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