Demand and Supply

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Demand and supply The term demand refers to the quantity of a given product that consumers will be willing and able to buy at a given price. As a general common sense rule - 'the higher the price of a particular product the lower will be the demand for it '. The term supply refers to the quantity of a particular product that suppliers (producers and/or sellers) will make available to the market at a particular price. The higher the price, the greater the quantity that suppliers will be willing to supply to the market. Markets consist of individual or groups of businesses that are prepared to supply a product, and customers who demand the product. Market price is determined by the interaction of the forces of demand and supply.…show more content…
In the modern high-tech world there are also important factors that influence supply. Nowhere is this truer than in the development of new production technologies leading to the production of high volume low cost goods. For example, in recent years Coca-Cola has developed high-tech canning factories that use less costly and cheaper materials in the production of cans. Wants - a want is simply a desire for a product; it is not the same thing as demand. Effective demand - refers to a desire for a product that is backed up by a purchasing decision. For demand to be effective the consumer needs to have the money required to make the purchase. Elasticity of demand - refers to the sensitivity of demand to a change in price. The more sensitive demand is (i.e. the more it changes) to a price change the more elastic it is said to be. Actions Whats this? > Using the buttons below you can download this case study, print this page, download or play an audio transcription of this case study, tell a friend and more. Have any feedback? Tell us! * Speech Bubble Tell a Friend! * RSS RSS Subscribe * Newsletter Subscribe Newsletter Get the Newsletter Email Forename Surname School Postcode I am Print Print Document PDF Download PDF Related Theory Other revision theory of

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