Demand and supply is one such principle that occurs everywhere, from daily necessities such as rice to Veblen goods such as luxury cars. This principle helps us understand why the prices of items increase or decrease. To explain this phenomenon i will use the Anglo Chinese School International popular book store
.Before we began discussing this principle, we have to understand what is demand and supply. Demand is the quantity of a good or service that consumers are willing to and able to purchase at a given price in a given period. Basically, when the price of a product drops, the Quantity demanded will rise.
Supply, on the other hand, is the willingness and ability of producers to produce a quantity of a good or service at a given price in a given period of time. Usually, as the price of the product rises, the quantity supplied of the product will increase.
In our school bookshop, there could be a new economics IB textbook available for purchase at $100; but this book could be optional. Therefore, not all 120 economics students in Year 5 might want to purchase it. The bookshop will order only 40-50 rather then she order just enough for all and later find out no one wants to buy it.Reasons why students would not want to buy the book may be due to the factors affecting demand. Firstly, not everyone could afford the book at a $100 dollars and might just want to photo-copy(income). Secondly, there could be substitutions to the book which might cheaper and thus more affordable and maybe this book is only useful with a complimenting workbook: which might again make the book too expensive for some(the price of other products). Finally, the book might not be as useful to everyone as some might not like the style of the writer and thus might not understand from the book (taste).
If the bookshop is seeing that all the books have been sold and there is a demand for more of them, it will order more of the books and this time, perhaps, also increase the price of the book to increase its profits. However, there might be supply factors preventing the bookstore from ordering more. For example, the publisher might have increased their selling prices seeing the great response and this might prevent the bookshop to purchase more books as now to keep their profits the same, the cost of the book will increase and buyers will then be more reluctant to buy the book. Due to the economic rescission, the cost of raw materials might have also gone up and this the profits made from the selling the book are now decreased.
Demand and supply is not a very difficult concept to understand but it is a very important concept. We can now use this concept and understand how the stock market works and why prices fluctuate in the real world. When demand exceeds supply or vice versa, an excess or shortage occurs. under this situation, market forces will work towards achieving an equilibrium where deamnd meets supply hence eliminating the excess or shortage.In conclusion, many factors affect demand and supply,and they work hand in hand to help us understand this world
HARSH 5W
.Before we began discussing this principle, we have to understand what is demand and supply. Demand is the quantity of a good or service that consumers are willing to and able to purchase at a given price in a given period. Basically, when the price of a product drops, the Quantity demanded will rise.
Supply, on the other hand, is the willingness and ability of producers to produce a quantity of a good or service at a given price in a given period of time. Usually, as the price of the product rises, the quantity supplied of the product will increase.
In our school bookshop, there could be a new economics IB textbook available for purchase at $100; but this book could be optional. Therefore, not all 120 economics students in Year 5 might want to purchase it. The bookshop will order only 40-50 rather then she order just enough for all and later find out no one wants to buy it.Reasons why students would not want to buy the book may be due to the factors affecting demand. Firstly, not everyone could afford the book at a $100 dollars and might just want to photo-copy(income). Secondly, there could be substitutions to the book which might cheaper and thus more affordable and maybe this book is only useful with a complimenting workbook: which might again make the book too expensive for some(the price of other products). Finally, the book might not be as useful to everyone as some might not like the style of the writer and thus might not understand from the book (taste).
If the bookshop is seeing that all the books have been sold and there is a demand for more of them, it will order more of the books and this time, perhaps, also increase the price of the book to increase its profits. However, there might be supply factors preventing the bookstore from ordering more. For example, the publisher might have increased their selling prices seeing the great response and this might prevent the bookshop to purchase more books as now to keep their profits the same, the cost of the book will increase and buyers will then be more reluctant to buy the book. Due to the economic rescission, the cost of raw materials might have also gone up and this the profits made from the selling the book are now decreased.
Demand and supply is not a very difficult concept to understand but it is a very important concept. We can now use this concept and understand how the stock market works and why prices fluctuate in the real world. When demand exceeds supply or vice versa, an excess or shortage occurs. under this situation, market forces will work towards achieving an equilibrium where deamnd meets supply hence eliminating the excess or shortage.In conclusion, many factors affect demand and supply,and they work hand in hand to help us understand this world
HARSH 5W
Definitely a fantastic application of the demand and supply concepts in the life of a student. What would make your blog posting more enriching is if you were able to explain how exactly it relates to complements, income etc, rather than just write out (income) so that readers can see your train of thought when you describe the relation in greater depth.
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