Effect Of The Law Of Supply And Demand

1798 Words Nov 18th, 2014 8 Pages
The effect of the law of supply and demand is clearly demonstrated in the news article titled “Gas prices go below $3” (Isidore, 2014) which is closely related to the article “Oil prices are plunging. Don 't cheer yet” (Egan, 2014). We begin by analysing the supply of gasoline, which has been increased by several supply shifters. One of the factors is the increase in capacity of existing oil refineries, which produce petroleum (EIA, 2013). Another aspect is the improvements of refining technologies that allow more gasoline to be yielded out of the same amount of crude oil (GAO, 2005). Nevertheless, one of the most crucial supply shifters is the price of input which is, in this case, the price of crude oil that has recently fallen “below …show more content…
This is true, as we can see from the news item.
Entry Barriers
The existence of entry barriers into a market can be seen in the articles titled "Why Retailers Will Love the Apple Pay Era” (Stock, 2014) and “Apple Pay Is Too Anonymous for Some Retailers” (Brustein, 2014). With the release of the iPhone 6 and iWatch, Apple has introduced a new feature on both of them: “the ability to not only make payments with your mobile device (as opposed to a credit or debit card), but to make payments that are supposedly more secure than traditional American credit card purchases” (Abel, 2014). Thus, with the release of Apple Pay, the American corporation (Apple) has entered the market of cashless transactions and has to compete not only with prominent financial services corporations (e.g. Visa or MasterCard) and with known e-commerce businesses (e.g. PayPal), but also with less known, but fast developing products in the mobile payment and digital wallet industry (e.g. CurrentC, Google Wallet, Softcard). Apple can successfully avoid several barriers to entry that could have encountered smaller entrants. For instance, the American corporation possess the required financial resources for operations, research and development (R&D) expenditure and advertising. Apple has already a very strong brand, which
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