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Consumer Demand

Explaining supply, finding equilibrium, the bottom line.

• Macroeconomics

Introduction to Supply and Demand

• A Practical Guide to Microeconomics
• Economists' Assumptions in their Economic Models
• 5 Nobel Prize-Winning Economic Theories
• Understanding Positive vs. Normative Economics
• What Factors Influence Competition in Microeconomics?
• How Does Government Policy Impact Microeconomics?
• Understanding Microeconomics vs. Macroeconomics
• Differentiate Between Micro and Macro Economics
• Microeconomics vs. Macroeconomics Investments
• Introduction to Supply and Demand CURRENT ARTICLE
• Is Demand or Supply More Important to the Economy?
• Law of Demand
• Demand Curve
• Law Of Supply
• Supply Curve
• Price Elasticity of Demand
• Understanding Elasticity vs. Inelasticity of Demand
• Factors Determining the Demand Elasticity of a Good
• What Factors Influence a Change in Demand Elasticity?
• What Is the Concept of Utility in Microeconomics?
• What Is the Utility Function and How Is it Calculated?
• Total Utility
• Marginal Utility
• Law Of Diminishing Marginal
• What Does the Law of Diminishing Marginal Utility Explain?
• Economic Equilibrium
• Income Effect
• Indifference Curve
• Consumer Surplus
• Comparative Advantage
• Economies of Scale: What Are They and How Are They Used?
• Perfect Competition
• Invisible Hand
• Market Failure

The law of supply and demand is a fundamental concept of economics and a theory popularized by  Adam Smith  in 1776. The principles of supply and demand are effective in predicting market behavior. Whether an individual is a manufacturer or a consumer, the supply and demand equilibrium is relevant in daily market transactions.

Key Takeaways

• The law of supply and demand was popularized by Adam Smith in 1776.
• Consumer demand for a good commonly decreases as its price rises.
• As prices of a good increase, producers manufacture more to realize more profits.

Consumer demand for a good commonly decreases as its price rises. The figure below depicts the relationship between the price of a good and its demand from the consumer's standpoint. The demand curve is portrayed from the view of the consumer, whereas supply graphs are drawn from the producer's perspective.

If televisions were priced at $5 each, then consumers would purchase them and probably buy more TVs than they need based on price. The demand will remain high. If the price is $50,000, this good would likely be considered a luxury good , and demand would be low.

Demand is the quantity of a good that consumers are willing and able to purchase at various prices at a given time.

This example assumes that product differentiation does not exist. There is only one type of product sold at a single price to every consumer. In this closed scenario, the item is not an essential human necessity such as food or shelter, does not have a substitute, and consumers expect prices to remain stable. 

The supply curve considers the relationship between the price and available supply of an item from the producer's perspective rather than the consumer's.

When prices of a product increase, producers are willing to manufacture more of the product to realize greater profits. Falling prices depress production as producers may not recover input costs. If the costs to produce a TV are $50, production would be unprofitable when the selling price of the TV falls below $50.

If television prices are $1,000, manufacturers will focus on producing television sets over ventures and provide incentives to build more TVs. The behavior to seek maximum profits forces the supply curve to be upward-sloping. 

An underlying assumption of the theory lies in the producer taking on the role of a price taker. Rather than dictating the prices of the product, this input is determined by the market, and suppliers only face the decision of how much to produce, given the market price. Optimal scenarios are not always the case, such as in monopolistic markets.

Consumers typically look for the lowest cost, and producers test their products at the highest price. When prices become unreasonable, consumers change their preferences and move away from the product.

A proper balance must be achieved where both parties engage in ongoing business transactions to benefit consumers and producers. In supply and demand theory, the optimal price that results in producers and consumers achieving the maximum combined utility occurs where the supply and demand lines intersect.

In What Types of Economies Are Laws of Supply and Demand Less Reliable?

If the economic environment is not a free market, supply and demand are not influential factors. In  socialist economic systems , the government typically sets commodity prices regardless of the supply or demand conditions.

Does the Law of Supply and Demand Determine Market Conditions?

Multiple factors affect markets on both a microeconomic and a macroeconomic level. Supply and demand guide market behavior but do not determine it. Supply and demand are important factors, and Adam Smith referred to them as the  invisible hand  that guides a free market.

Does the Law of Supply and Demand Apply Only to Consumer Goods?

The theory of supply and demand relates not only to physical products such as television sets but also to wages and labor. More advanced theories of microeconomics and macroeconomics often adjust the assumptions and appearance of the supply and demand curve to illustrate concepts like economic surplus, monetary policy, aggregate supply and demand , fiscal stimulation, elasticity, and shortfalls.

The market theory of supply and demand was popularized by Adam Smith in 1776. Consumer demand for a good decreases as its price rises. As prices rise, producers manufacture more to gain more profits. The optimal price that shows an equilibrium between supply and demand is where the supply and demand lines intersect on a graph.

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Introduction to Demand and Supply

Chapter objectives.

In this chapter, you will learn about:

• Demand, Supply, and Equilibrium in Markets for Goods and Services
• Shifts in Demand and Supply for Goods and Services
• Changes in Equilibrium Price and Quantity: The Four-Step Process
• Price Ceilings and Price Floors

Bring It Home

Why can we not get enough of organic foods.

Organic food is increasingly popular, not just in the United States, but worldwide. At one time, consumers had to go to specialty stores or farmers' markets to find organic produce. Now it is available in most grocery stores. In short, organic has become part of the mainstream.

Ever wonder why organic food costs more than conventional food? Why, say, does an organic Fuji apple cost $2.75 a pound, while its conventional counterpart costs $1.72 a pound? The same price relationship is true for just about every organic product on the market. If many organic foods are locally grown, would they not take less time to get to market and therefore be cheaper? What are the forces that keep those prices from coming down? Turns out those forces have quite a bit to do with this chapter’s topic: demand and supply.

An auction bidder pays thousands of dollars for a dress Whitney Houston wore. A collector spends a small fortune for a few drawings by John Lennon. People usually react to purchases like these in two ways: their jaw drops because they think these are high prices to pay for such goods or they think these are rare, desirable items and the amount paid seems right.

Visit this website to read a list of bizarre items that have been purchased for their ties to celebrities. These examples represent an interesting facet of demand and supply.

When economists talk about prices, they are less interested in making judgments than in gaining a practical understanding of what determines prices and why prices change. Consider a price most of us contend with weekly: that of a gallon of gas. Why was the average price of gasoline in the United States $3.16 per gallon in June of 2020? Why did the price for gasoline fall sharply to $2.42 per gallon by January of 2021? To explain these price movements, economists focus on the determinants of what gasoline buyers are willing to pay and what gasoline sellers are willing to accept.

As it turns out, the price of gasoline in June of any given year is nearly always higher than the price in January of that same year. Over recent decades, gasoline prices in midsummer have averaged about 10 cents per gallon more than their midwinter low. The likely reason is that people drive more in the summer, and are also willing to pay more for gas, but that does not explain how steeply gas prices fell. Other factors were at work during those 18 months, such as increases in supply and decreases in the demand for crude oil.

This chapter introduces the economic model of demand and supply—one of the most powerful models in all of economics. The discussion here begins by examining how demand and supply determine the price and the quantity sold in markets for goods and services, and how changes in demand and supply lead to changes in prices and quantities.

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• Introduction

Demand curve

Supply curve.

• Market equilibrium, or balance between supply and demand

supply and demand

supply and demand , in economics , relationship between the quantity of a commodity that producers wish to sell at various prices and the quantity that consumers wish to buy. It is the main model of price determination used in economic theory. The price of a commodity is determined by the interaction of supply and demand in a market . The resulting price is referred to as the equilibrium price and represents an agreement between producers and consumers of the good. In equilibrium the quantity of a good supplied by producers equals the quantity demanded by consumers.

The quantity of a commodity demanded depends on the price of that commodity and potentially on many other factors, such as the prices of other commodities, the incomes and preferences of consumers, and seasonal effects. In basic economic analysis, all factors except the price of the commodity are often held constant; the analysis then involves examining the relationship between various price levels and the maximum quantity that would potentially be purchased by consumers at each of those prices. The price-quantity combinations may be plotted on a curve, known as a demand curve , with price represented on the vertical axis and quantity represented on the horizontal axis. A demand curve is almost always downward-sloping, reflecting the willingness of consumers to purchase more of the commodity at lower price levels. Any change in non-price factors would cause a shift in the demand curve, whereas changes in the price of the commodity can be traced along a fixed demand curve.

The quantity of a commodity that is supplied in the market depends not only on the price obtainable for the commodity but also on potentially many other factors, such as the prices of substitute products, the production technology, and the availability and cost of labour and other factors of production . In basic economic analysis, analyzing supply involves looking at the relationship between various prices and the quantity potentially offered by producers at each price, again holding constant all other factors that could influence the price. Those price-quantity combinations may be plotted on a curve, known as a supply curve , with price represented on the vertical axis and quantity represented on the horizontal axis. A supply curve is usually upward-sloping, reflecting the willingness of producers to sell more of the commodity they produce in a market with higher prices. Any change in non-price factors would cause a shift in the supply curve, whereas changes in the price of the commodity can be traced along a fixed supply curve.

Home — Essay Samples — Economics — Supply and Demand — The Dynamics of Supply and Demand in Economics

The Dynamics of Supply and Demand in Economics

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Supply and Demand, Essay Example

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The everyday occurrence of buying a new car has profound lessons for the discipline of economics.  On the demand side, there are numerous factors that affect purchasing a new car.  For example, demand for cars might be influenced by changes in prices of substitutes: If the price for public transportation (whether for train, bus, or subway) or motorcycles decreases dramatically might lead to less demand for cars (Mankiw, 2001). That is because consumers can pay less money and still receive similar benefits.  Another key demand side factor is interest rates charged on car loans or the availability of credit.  Since a majority of cars are bought on credit, a reduction in interest rates would lower the cost of financing (and ultimately the car) making cars more attractive to consumers. By the same token, if the standards for credit availability were lowered, this might also lead to greater demand for cars.  A contraction in credit or higher interest rates would likely lead to a contraction in demand as the price of the car increases. Third, changes in advertising or fashion can affect demand via an individual’s preferences vis-à-vis car purchase.  For example, many car makers are making more energy efficient cars that have less of an impact on the environment.  Consumers that normally wouldn’t buy cars, or may consider other substitutes, may purchase cars deemed “environmentally friendly.” Or perhaps advertising that stresses cars made in the United States has a palpable impact on consumers and increases individual demand by moving the demand curve.  Lastly, consumer sentiment plays a key role in shaping demand for automobiles: During the depths of the global recession, demand for cars plummeted as consumer sentiment over the future, including the ability to make car payments, deteriorated. As the economy and consumer sentiment gradually improved, so did the market for automobiles.

There are three main factors related to the supply of cars (Baumol& Blinder, 2004).  The first factor is the price of inputs used in building cars.   Cars are composed of many parts that vary in price over time. If the prices of inputs increase, the manufacturer has to decide whether to raise the price of the car which may lead to decreased supply.  On the other hand, if there is a significant decrease in the price of inputs, the car manufacturer might be willing to supply more cars.  The second main factor in deciding supply is the market structure of the car industry.  Traditionally, the car industry is extremely competitive, particularly after car manufacturers from India and China have now started to export cars.  With an increase in the number of manufacturers, and arguably competitiveness in the car industry, manufacturers may choose to reduce supply in order to avoid the situation of unsold cars. On the other hand, if  there is an overall decrease in the number of manufacturers, other manufacturers may choose to increase supply to make up for lost production in the market.  The last main factor is the producer’s expectation in the production of cars.  For example, a producer may look at factors such as consumer demand and price in order to decide how many cars to supply in the market.  Future expectations are very important as car manufacturers typically make production decisions 1-2 years in the future based on existing trends.

Demand and supply for cars may also have an impact on complementary goods such as GPS tracking systems.  GPS systems are a complementary good because car manufacturers or consumers who purchase cars also purchase GPS systems.  Another complementary good for cars is gasoline.  Gasoline must be purchased in order for a car to properly operate.  Higher prices for cars may have an adverse impact on the quantity of gas purchased, especially during times of an economic downturn or high gas prices.  An increase in the price of gas may also influence the quantity and type of car purchased.  Due to the wide range of cars available, price elasticity plays a significant role in the type of car purchased.  For example, due to the segmented nature of the car market, lower-priced cars likely have a higher price elasticity of demand.  For example, if Ford raises prices too high on a lower-end model, consumers will likely simply purchase another type of car.  At the upper end of the car market, however, price elasticity of demand is likely quite low.  That is, if Mercedes raised the price of a car $5,000, it is not clear that a consumer would necessarily purchase a BMW instead.  This is because consumers at higher price levels are less sensitive to changes in price.

Mankiw, G.  (2001). Principles of Economics.   New York: Southwestern Press.

Baumol, W. & Blinder, A. (2004).  Microeconomics Policy.  New York: Southwestern Press.

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Supply and Demand Essay

In economics, the terms “Supply” and “Demand” are of fundamental importance to the discipline because they are the factors that drive all other related activities of the economy. Argumentatively, although the field is broad and these two are like the pillars that hold together everything else in place, the exchange of goods and services from the seller side and the buyer’s side. Simply put, the demand covers the customer side while the supply side covers the seller’s side, who provide the goods or service. So, this, paper will discuss in detail the two terms and extensively cover what they mean in the context of economic transactions and how they relate. Also, the paper will seek to explore the shifts in demand and supply; because they are not static but are subject to changes of either going up or going down- for both depending on various factors that will form part of the subsequent discussions of this paper.

At this point, it is important to note while they are closely related, it is not automatic that an increase will one will cause the same reaction for the other. Each independently responds differently to certain factors. However, in a state of equilibrium, the shifts are similar where if demand, increases the seller responds also by increasing their goods or services(Bas, et al. 4). For each, the discussions will revolve around meaning, application in the real-life, and the relationship with the causal agents that leads to particular changes. The figure below shows the relationship between demand and supply that will guide the subsequent discussions.

Figure 1 Relationship between Demand and Supply

Demand in the field of economics refers to the total amount of goods or services that consumers are able and willing to pay for it when it is at that price. In practice, demand is usually different at each price level which is the main factor that influences the patterns of consumers’ behavior. The price is used as the reference point of explanation because it usually reflects the value of a product and its utility preference to the buyer. In particular, just how much is a customer willing to pay and what amount of the product or service do they want for it at that price is what demand is all about(Bas, et al. 11). In some of the cases, a customer attending a fair on a hot day may be willing to pay more for a glass of lemonade than if they had attended the fair when the weather was cold. So, demand is the total amount of product that a consumer will be expecting in return for money of a certain value.

At different prices, the quantity will change because of the different factors mentioned in the subsequent parts of the paper. From this example, it is clear that the demands thus also exist at different levels; the first is the market demand for the product itself in the economy and the second is the aggregate collective demand of all the products that exist in the market for that economy. In the first level, the focus is the product itself in the context of the consumer, and for the second, it is all the products that are present in that specific jurisdiction. A good example is a demand for a GTI muscle automobile in the US may be 15 % while the demand for all cars in the US is 56%. Therefore, in the first example, the particular product is assessed individually within the context of the market while in the second level it is all products that the same, i.e. cars, that are calculated.

Supply, on the other hand as aforementioned represents the other side of the economic transaction divide, the suppliers. The suppliers’ framework is overly broad and is used to refer to all such factors that are elements of production including labor, money, and companies that collectively produce the goods to the buyer. Supply: therefore, this definition refers to the total amount of goods and services that the supplier is willing to produce and offer to the market at a certain price (Moheb-Alizadeh and Handfield 5). Using the earlier example, now the seller of the lemonade at the fair is willing to make a certain amount of the drink for the market at a particular price. So, for example, if the fair is hosted on a sunny day, the price is higher and thus he or she may be willing to produce more lemonade for the fairgoers. However, on a cold day when the price of the lemonade is lower, he may only be willing to produce a lower amount of lower to reduce. The price is used as the central incentive in an economy that is why in both cases it is the principal elements that are used to define both supply and demand. As stated earlier, the movements are not static but rather shift according to different factors.

The shifts in the demand and supply of the goods and services for a particular product is dependent primarily on the prices of the inputs that are used in the production of the goods and services such as labor, raw materials, tariffs attached to the product and technical resources involved in the production. Similarly, for the demand for a good or service shifts according to the prices set for the product or service (Mankiw 54). When the prices are higher and other factors remain constant regarding the product, the demand reduces and when the prices reduce, the demand increases. From this point of view, it is accurate to hypothesize that demand and supply shifts according to how the prices move when all other factors remain constant.

Works Cited

Bas, M., et al. “From micro to macro: Demand, supply, and heterogeneity in the trade elasticity.”  Journal of International Economics , vol. 108, 2017, pp. 1-19, doi:10.1016/j.jinteco.2017.05.001.

Mankiw, N. G.  Essentials of economics . Cengage Learning, 2020.

Moheb-Alizadeh, H., and R. Handfield. “Developing talent from a supply–demand perspective: An optimization model for managers.”  Logistics , vol. 1, no. 1, 2017, p. 5, doi:10.3390/logistics1010005.

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• Fundamentals of Supply and Demand

Understanding the Basics of Supply and Demand

Supply and demand are the financial framework that serves as the foundation of the consumer economy. It plays huge role in affecting the procurement functions in a business or an organization. Suppose you are someone who wants to launch a new product or a service, but you need to figure out its overall quantity to be produced or what price to set for that product or service in the market. Here comes the supply-demand relationship into play. In such cases, it is the supply and demand relationship that one can analyze to acquire potential profit from that product or service. In simple words, everything depends on the demand of the product.

The Law of Supply and Demand

The law of supply and demand represents a theory that describes the interaction between the supplier of a product or service and the buyer of that product or service. The process of price discovery in the market is represented by the intersection of these curves, which indicates the equilibrium or market-clearing price at which supply and demand are equal or balanced. Other than price variations, there are other factors that impact the supply and demand curves, including taxes, availability of the products, recognition of suppliers in the market, and government policies.

How does the law of supply and demand work?

The law of supply and demand entails the two fundamental economic concepts that illustrate how variations in the cost of a resource, product, or commodity influence its supply and demand. The demand for a product or a service experiences a downfall when the supply increases, whereas the supply decreases when the demand increases due to the reduction in the price of products or services. In addition, it states that the relationship between supply and demand governs the prices of various products or services. Levels of supply and demand for different prices can be represented on a graph as curves.

• The law of Supply: The law of supply states that when the price increases, businesses and organizations increase the supply of the products and services in order to make more profit. Thus, an increase in the price further increases the supply of products and services, as companies see greater opportunity for making money. Thus, the supply of a product or service decreases as the process fall.
• The law of Demand: The law of demand states that when prices increase, the process of purchasing reduces as the customers buy less. In simple words, an increase in the cost of products and services reduces its demand due to less purchasing done by the consumers or buyers. To put it simply, the demand for a resource, product, or commodity increases as prices fall.

Major Laws of Supply and Demand

The laws of supply and demand forecast four major ways that variations in any of the two components-supply and demand will bring changes in pricing.

• Prices decrease when supply increases, and demand stays unchanged.  This law explains that if the supply of a product or a service increases without any changes in its demand might result in an overflow of the product or service. In such cases, organizations reduce the prices of that particular product to boost its demand and increase productivity. It is implemented for many reasons, which include selling excess stocks, particularly if there is an approaching expiration date. Lowering the prices helps in increasing its demand.
• Prices decrease when demand decreases, and supply stays the same.  This law explains that a decrease in the demand for a product/goods or service without a change in its supply also creates an overflow of the product or goods. In such cases, prices are reduced by the organizations in an attempt to increase demand.
• Prices increase when demand increases, and supply stays constant.  This law states that there can be a shortage of a product or a commodity if its demand increases but the supply remains the same. This results in an increase in the price of the product until supply and demand are balanced.
• Prices increase when supply decreases, and demand remains unchanged.  This law describes that insufficiency or shortage of a product or commodity also occurs when the supply decreases, but the demand stays constant. In such situations, customers are ready to pay the increased prices to buy the product or avail service they prefer. In addition, several reasons result in a decreased supply, including supply chain problems. However, as soon as the issues related to the reduction in supply are resolved, prices return to their starting point.

Importance of the law of Supply and Demand

The law of supply and demand is very important because it enables economists, entrepreneurs, businessmen, and investors to understand better and forecast market situations. The market economies works on the basis of supply and demand as two major components. Moreover, supply and demand serve as the two forces that help organizations determine the selling price and the quantity of product, commodity, or service.

Therefore, supply and demand are an important aspect in procurement that helps you to understand the relationship between them and how its affects prices of various goods and services. In addition, supply and demand play a huge role in the amount of profit that any organization makes. Moreover, its serves as an economic model that provides the basic information for the consumer economy.

At Procurement Resource, we provide helpful information on supplier relationship management, spend analysis, risk, supply chain intelligence , cost modeling, categories, market research, procurement data analysis, and strategic outsourcing for a wide range of commodities. By assessing our broad range of services, you can help your business enhance suppliers' performance, reduce costs, promote efficiency, and improve the effectiveness of your procurement processes.

Our team of experts will help your organization deeply understand the market and mitigate risks associated with the variations in supply and demand. We assist you in achieving the best value procurement and executing required optimizations for an efficient procurement process. Get in touch with us right now to learn about our innovative strategies and expert analytical recommendations to maximize your procurement strategy.

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Supply and Demand Shocks: The Short-Term and Long-Term Drivers Oil Price Uncertainty

25 Pages Posted: 13 Sep 2024

Theodora Bermpei

University of Essex

Athanasios Triantafyllou

IESEG School of Management

In this research note we empirically show the role of supply and demand shocks as drivers of short and long-run price uncertainty in the crude oil market. We first define oil price uncertainty as the purely unforecastable component of oil price fluctuations and show that uncertainty of the short-run oil price fluctuations is driven by oil supply shocks, while the uncertainty for medium and long-run forecast horizons is mainly caused by aggregate demand. Interestingly, while our findings on the impact of oil supply disruptions on oil price uncertainty are in line with the implications of the theory of storage, we do not find similar results for the medium and the long, whereby   global economic activity is found to be the main driver for the increasing oil price uncertainty. From a policy perspective, policymakers could monitor signals of rising oil price uncertainty in the global crude oil market that are associated with oil supply disruptions in the short run and global demand for industrial commodities in the medium and long run.

Keywords: Oil market, Uncertainty, Realized Variance, Economic Activity

Suggested Citation: Suggested Citation

University of Essex ( email )

Wivenhoe Park Colchester, CO4 3SQ United Kingdom

Athanasios Triantafyllou (Contact Author)

Ieseg school of management ( email ).

Lille France

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Demand, Supply and Market Equilibrium Essay

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Demand is the quantity of products customers are willing to buy at a particular price while supply is the quantity of products firms are willing to offer for sell. There is an inverse relationship between demand and supply when all other factors remain constant. On the other hand, market equilibrium is attained at the point of contact between the equilibrium quantity on offer and the equilibrium price in the market. Here, the market is defined as buyers and sellers. The demand and supply for a product influence each other.

When equilibrium is attained, no changes in price occur. However, if the price of the product falls below the equilibrium price, the demand for the product is in excess creating a shortage. Here, shortage occurs when the quantity in supply is lower than the in demand. At this point, sellers provide fewer products than the quantity consumers are willing to buy.

When the price of a product is increased, positive changes in supply and demand occurs. Raising prices decreases excess demand for a product and cancels out the demand and supply differences, restoring the supply and demand equilibrium.

If supply exceeds demand, and the price reaches above the equilibrium point, the price is reduced by excess supply and causes the demand for the product to reduce. In this case, the gap between the quantity in demand and the quantity supplied reduces. An equilibrium point is attained when the demand and supply are the same. As exemplified in figure 1 below, when changes in quantity of the product in demand changes, there are changes in the supply of the product, shown in the movement of the arrow between points a and b.

There is a change in the quantity in demand as the line shifts from a to b and a change in demand as the graph in B above shifts toward the right direction. There is also a change in the product prices when the variables that cause changes in demand are factored into the graph shown above.

Factors such as increase in income, increase in the price of substitute goods, decrease in income, and changes in complementary factors cause changes in the curve. Complimentary factors include inferior, normal, preference, and substitute goods. A shift to the right influences the demand, supply, and product pricing positively.

The change is caused by increase in population, decrease in the prices of complimentary goods, expectation of higher future prices, and changes in consumer preferences. Therefore, a decrease in demand decreases the equilibrium price as mentioned above. A decrease in equilibrium price is caused by excess supply underpinned by decrease in the price of substitute goods, decrease in income, population decrease, and price increases of complimentary goods.

The changes in supply and demand have simultaneous effects on the market equilibrium. As illustrated in figure 2 below, the market equilibrium shifts to point b from point a, because demand exceeds supply. Here, a large increase in demand causes a sharp increase in prices. On the other hand, quantity increases with an increase in demand and supply.

Market equilibrium is attained when the quantity in demand equals the quantity being supplied as shown in figure 3 below. At this point, prices do not increase.

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IvyPanda. (2018, December 19). Demand, Supply and Market Equilibrium. https://ivypanda.com/essays/demand-supply-and-market-equilibrium/

"Demand, Supply and Market Equilibrium." IvyPanda , 19 Dec. 2018, ivypanda.com/essays/demand-supply-and-market-equilibrium/.

IvyPanda . (2018) 'Demand, Supply and Market Equilibrium'. 19 December.

IvyPanda . 2018. "Demand, Supply and Market Equilibrium." December 19, 2018. https://ivypanda.com/essays/demand-supply-and-market-equilibrium/.

1. IvyPanda . "Demand, Supply and Market Equilibrium." December 19, 2018. https://ivypanda.com/essays/demand-supply-and-market-equilibrium/.

Bibliography

IvyPanda . "Demand, Supply and Market Equilibrium." December 19, 2018. https://ivypanda.com/essays/demand-supply-and-market-equilibrium/.

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