Supply Demand and Price Elasticity

1061 Words May 13th, 2011 5 Pages
Supply, Demand, and Price Elasticity

Supply, Demand, and Price Elasticity

We use multiple products on a daily basis, from toothpaste to ink pens. Though we may use these items for mere moments, there is a different supply and demand cycle for them. Every product has a different supply and demand cycle, and this cycle varies throughout time. Some items may constantly be in demand, like cotton, and others may be in demand seasonally, like eggnog. These shifts in supply and demand may influence the price of certain products, how much of the product is available at any given time, etc. Commodities available during only peak times throughout the year may even be substituted with a similar item. These seasonal items are considered
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The production of polyester is considered as planet polluting. Another substitute would be Organic cotton, which is pesticide free and tinted naturally. Hemp is also a good substitution for cotton. According to the Hemp Industries Association, hemp has fewer pesticides than cotton. Cotton, when blended with other fabrics, can be substituted for 100% cotton making it less expensive than other fabrics like linen, wool, spandex, silks, and lycra.
Because cotton is so popular, an increase in price does not automatically mean that there will be a decrease in the quantity demanded. Since the first choice for clothing is cotton, people will continue to purchase clothing and there will not be an effect on the supply demanded, even with a price increase. With essential commodities, price increases will not negatively affect the quantity demanded. Cotton has an inelastic demand because the quantity is not affected (Elastic and Inelastic Demand).
Cotton is one of the most widely used products today. It is noted as having an inelastic demand because of the various other products that can be used in place of it. A change in price will more than likely have no effect on the decision to utilize its benefits, as it is present in many luxury and necessity items. However, if pricing is changed, causing a change in demand, businesses could
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