Demand and Supply

[Name of the Institute]

Abstract

The main focus of the paper is on the economic concept of demand and supply. Furthermore, the economic theory is taken in to account. Three articles are defined in the first section of the paper. The second section includes the reasons of why Ferrari's demand is considered to be inelastic. The third paper however, takes in to account the health care management industry in the United States. The 2011 statistics are provided from the official website of the government of United States. The demand and supply as well as their impact on the industry is also given. Demand and Supply

Demand and supply have an in inverse relationship as compared with the price. It is generally considered if all other factors remain constant, when prices increases demand decreases and when price decreases demand tends to increase (Henderson, H. D. 1958). Similarly if price increases, the supply increases as well and when the price decreases, the supply decreases as well.

Ans 1.

Electricity competition

In the article above, the demand for electricity has risen mainly because of an increase in the needs of people. This has motivated them to demand more. However, there are other factors which need to be taken in to account. These would include the decreased prices of 20 percent since 1997. When prices decrease, it leads to an increase in the demand of a competition. In addition to that, there is one more factor which is considered in this scenario. This factor is the one of the determinants of supply. The selling power of the suppliers has decreased considerably because the market has witnessed an increase in the number of suppliers. Thus, this has led to a more competitive market and since the consumers have more choice now, the price has also become strictly competitive as well.

Coffee

The consumption of coffee has been made a routine, especially in American lives. The consumers have managed to make it their need and thus the consumption have substantially increased. When the product becomes a need, a change in the price does not affect the product's demand equally. However, a minor change is still expected of the demand of that particular product. The coffee prices had risen, but even this has not affected the consumer demand to the same extent. This highlights the inelasticity of the price. However, even after this, some consumers are looking for alternates to coffee and some have even switched to tea. In addition to that, the demand for coffee saw a substantial increase a few years back. This was mainly because of an increase in the incomes of the consumers. Income is one of the determinants of demand and has a major effect on demand. The people have started to consume more than what they did preciously as they are able to afford more of the same product now.

Automobiles

If a product manages to establish a reputation or the demand of the product is high because of its branding or its high quality, the prices ...