Supply and Demand
Overview
Market demand represents the sum of the individual demand for a commodity (a good or a service) from buyers in the market. If there are more buyers who are willing and able to pay for a commodity, then market demand at each price level will rise. On the other hand, market supply represents the total quantity of a commodity that producers are willing and able to provide to the buyers at a given price level. Market equilibrium occurs where the quantity supplied equals the quantity demanded, and the market price (equilibrium price) is set at that quantity (equilibrium quantity).
The equilibrium price and equilibrium quantity are not static, however, meaning that they change due to changes in market demand or market supply. A commodity that once was popular and its production was profitable, for example, might lose popularity. As a result, its price declines and its profitability declines, too. Whenever the demand for a commodity rises or declines and whenever the production of a commodity expands or shrinks, it is certain that a market force or a set of forces have taken place to cause this change. At the same time, whenever market demand and/or market supply change, the market price and quantity of that commodity changes, too.
Dynamic and free markets are constantly changing due to changes in factors (determinants) that affect either demand, supply, or both.
Analyzing and understanding the forces behind the shift in market demand and market supply determines the growth pattern of the commodity.
Assignment Description
1) Analyze the changes in market demand and market supply for a commodity and how the changes in demand and supply affected the market price and production of this commodity.
2) Address the key factors (determinants) that have caused the shift in demand and/or the shift in supply.
3) Describe your commodity and the market that commodity targets (geographic or demographic).
4) State when, how, and why the commodity has became popular or less popular.
5) State the factors (demand determinants and supply determinants) that have caused its supply and demand to change and how those changes affected it price. Basically, why has demand and supply for that commodity changed?
Writing Style (APA) and Page Number Requirements
- Font Type: Times New Roman or Arial
- Font Size: 12
- Spacing: Double
- Number of Pages: Three to five pages, not counting the separate Title page and the separate References page
- Structure and Requirements