Causes of Changes in Supply and Demand Essay

532 Words 3 Pages
Introduction*

*A basic economic concept plays a vital part in prices of goods. The prices are set in a market that is supported by the laws of supply and demand. Supply and demand factors determined the wants and desires of people or a group. Supply is the product or service a producer has uncommitted and capable to legal transfer by selling . Demand is the amount of the product or service that buyers want to buy .This means that every market has two sides. The two sides are buyers and sellers. The demand side of the market are the buyer. The supply side of the market are the sellers. The relationship of supply and demand has a lot of influence on the price of tangible and intangible goods that are made and bought to satisfy the
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The rice grower and shrimp farmers are not concern about the income of the buyers. It is the cost of that affect them. When one factor changes, it affects supply or demand, not both. *The causes of changes in supply and demand are based on people's behavior to cost and benefits. This means that when people realize that the costs of an activity have raised or the benefits of an activity reduced, people execute the activity less because the common factor is price. For example, a person buying shrimp fried rice are not concern about what the shrimp or rice cost, including the details of growing rice or shrimp breeding. The rice grower and shrimp farmers are not concern about the income of the buyers. It is the cost of that affect them. This mean, when one factor changes, it affects only supply or demand, not both. *Changes in market demand can be caused by "many variables other than price can influence market demand. These five are the most important: Income, prices of related goods, tastes, population and demographics, and expected future prices, including change in information/technology. this means that these economic drivers for change in demand of a given good or service." (Hubbard and O’Brien. 2010). *Changes in the market supply can be caused by Variables That Shift Market Supply. Hubbard and O’Brien stated that "the most important variables that shift market supply: prices of inputs,

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