DEMAND AND SUPPLY

Demand and Supply



Demand and Supply

Introduction

In this age of technology, the market place is full of variegated goods and service. It is also very important to note the significance of the factors and relationship of demand and supply. The factors of demand and supply keep the market alive and competitive. For example, consider the market structure and shape of gasoline and water. If the gas station, near your workplace or residence raises the price of the gas by few bucks, then you may prefer to change the gas station and start filling gas from other gas station of another company.

Now consider the case of water supplier. If the water supplier raises the charges by few bucks, then people may prefer to lower down the amount of water that they give to the lawns and may prefer to use water efficient shower, but it is difficult for them to switch and move towards another supplier. This situation of two markets reveals that a lot depends on the phenomena of demand and supply. It is possible for consumers of gas to switch the gasoline supplier because there are many suppliers in the market of gasoline. On the contrary, the consumers of water cannot switch and move towards another supplier because there are not many suppliers of water. The availability of suppliers and the type of the good that these suppliers offer to the consumers create a different type of competition in the market. These different types of competitions create different condition of demand and supply that can cause a shift in the demand curve or a movement along the demand and supply curve. The main aim and objective of this paper is to talk about the phenomena of demand and supply and changes in the demand and supply curves from variegated perspective.

Explanation about the Meaning of Supply and Demand

The definition of supply is the amount of good or service that the seller is selling. This can be a good or service such as bikes, hours of driving lessons, candy or anything else that comes to mind. Demand is the quantity of good or service that people want to buy. Almost all human beings on the planet demand a good or service, gold, rice, orange juice, higher education. But the most interesting element of supply and demand is how they interact with each other. Supply and demand for a good or service affects according to the price change. Take a simple example, a man wants to buy sunglasses. Human beings require sunglasses because the sun bothers in daily work and is therefore willing to pay enough for them. This man goes to the centre of the city and sees that the sunglasses are very cheap, so he decides to buy two. As the price is lower the sunglasses' demand increases. To take another example, a child goes to the kiosk to buy candy, but when he sees that the prices of the candies have gone up in price and worth much ...