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Demand and Supply (Gabriela Rios & Mariana Ovalle) - Coggle Diagram
Demand and Supply (Gabriela Rios & Mariana Ovalle)
What is it?
Relationship between the quantity of a commodity that producers wish to sell at various prices and the quantity that consumers wish to buy
Supply-and-demand analysis may be applied to markets for final goods and services or to markets for labor, capital, and other factors of production.
It can be applied at the level of the firm or the industry or at the aggregate level for the entire economy.
Demand curve
It depends on the price of that commodity and potentially on many other factors
prices of other commodities
incomes and preferences of consumer
seasonal effects
All factors except the price of the commodity are often held constant
The price-quantity combinations may be plotted on a curve,
Supply Curve
The quantity of a commodity that is supplied in the market depends not only on the price obtainable for the commodity
but also
the prices of substitute products
the production technology
the availability and cost of labour
other factors of production
Analyzing supply involves looking at the relationship between various prices and the quantity potentially offered by producers
At each price holding constant all other factors that could influence the price
Those price-quantity combinations may be plotted on a curve
Market Equilibrium
Function of a market to equate demand and supply through the price mechanism
Examples
If buyers wish to purchase more of a good than is available at the prevailing price, they will tend to bid the price up
If they wish to purchase less than is available at the prevailing price, suppliers will bid prices down
As the price rises, the quantity offered usually increases
There is a tendency to move toward the equilibrium price
The iPhone 11
The iPhone 11 was released in the fall of 2019
There was an enormous demand for the new phone
Apple wasn’t able to meet this demand with a steady supply
The company hadn’t expected this many consumers to purchase the iPhone 11 over their higher-end models
Prices weren’t necessarily affected by this issue, since Apple maintained the same price tag for the iPhone 11
It took 21 days during the first two weeks for Apple to get iPhone 11 orders out
That didn’t look great for the company
Supply and demand is also about being able to anticipate the needs and wants of your consumers and ensuring that your production processes can keep up
References
https://www.lessonpaths.com/supply-and-demand-real-life-examples/
https://www.britannica.com/topic/supply-and-demand
