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Factors affecting Supply and Demand.

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Factors affecting Supply and Demand Economic require us to study demand and supply in order to understand consumer behaviors and the determination of price levels. Demand, in definition, is "the quantity of goods or services that will be bought at any given price over a period of time and supply is the willingness and ability to sell a good or service". (Alain Anderton, 1991, Economics Third Edition) A market exists wherever there are buyers and sellers of a particular good. Buyers demand goods from the market whilst sellers supply goods to the market. The same as the supply, individual and market demand information can be expressed in the form of curve. Now I will examine factors that represent shifts in demand and supply curves. Firstly, I will consider the demand curve. Think about what factors determine how much of some goods you want to buy. Price of the good is really a significant factor. When we talk about quantity demanded, normally we are take place on a given demand curve. The price of good is only that affects these curves will have changed. If something others have changed, the demand curve change. It is not hard to image if the average price of a house were to fall from �80,000 to �40,000, then it is not difficult to guess that the quantity demanded of houses would rise. ...read more.


But in the third world, labour is cheap. So the firms in Britain demand the labour from the third world. In some non-technical trades, normally we can see the foreigners work for the part or full time to satisfy the social need. There are wide variety of other factors that affect the demand besides price, income and the prices of other goods. The demands for some goods and services are very impressionable to changes in the taste and fashion. Particularly affected are the clothing trades, but industries such as producing furniture and processed foods are also subject to movements in taste and fashion. Teenager group pressure can influence demand for products. For example, many youngsters influenced by their friends, they prefer mountain bikes rather than ordinary bikes. What else, advertising, weather, time period and population are also can cause of changes in demand. Each of the above factors is held fixed when drawing the demand curve for a product. If one of these factors changes then the demand curve will shift. Now we consider the factors affecting the supply. The same as demand, the price of good also can change the supply curve. In general, "quantity supplied will rise if the price of the good also rises, all other things being equal". ...read more.


The other factors that have been identified as important in determining supply behavior include prices of inputs, expectation about future prices and time period being considered. A simple example can give you an overall realize about the factors affecting demand and supply. Rose as it's delicate and charming is very popular in Britain. Valentine's Day requires the heaviest demand for long-stemmed roses, and several rosebuds must be in order to create a single long-stemmed rose. After the Christmas season demand for red roses is filled, growers need 50-70 days to produce enough roses for Valentine's Day. Winter's shorter daylight hours and higher energy costs obstacle to grow large rose crops. Inclement weather often requires extreme measures to ensure that flowers are delivered in time. To fulfil the number of orders for Valentine's Day flowers, florists have to hire more help, work longer hours and get extra delivery vehicles and drivers. From the information above, I've almost analyzed the factors affecting supply and demand. In the economic theory, demand is seem to be emerging more important and effective on price mechanism than supply. But relatively, supply joins demand as one of the components of fundamental commodity market analysis. An understanding of the factors affecting supply and demand in the past will help with the development of supply and demand expectations in the future and the impact upon market price. ...read more.

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