Supply and Demand

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Supply and Demand Factors Understanding supply and demand is the underlying foundation of all economics. The term demand is used to indicate consumers’ willingness to buy while supply indicates willingness to sell. The relationship between demand and price is reflected by quantity demanded, meaning that at a certain price with everything else held constant, this is the amount people are willing to buy. The same applies for supply for quantity supplied, at a given price with all else constant this is the amount producers are willing to supply. A downward sloping line represents a demand curve, while conversely an upward line with a positive slope represents a supply curve. Movement along the curve, not to be confused with shift factors,…show more content…
Looking at the industry for gaming console as a whole the demand is high. With the upcoming holiday season people believe there will be a shortage of consoles and scramble to place their preorders. However if we only look at the demand for Sony’s PS4 we can see a higher demand based on some demand factors. The price for a substitute good, the Xbox, is higher, therefore increasing the demand for the PS4. Sony has also allowed for the gifting and resale of used games decreasing the price of a complementary good further increasing their demand. Xbox has reached their limit in current supply and are not taking in any more preorders. Sony is also trying to keep production in line with the high demand. There is an excess of demand for the limited amount of preorders. If looking at the gaming console in one market the demand is increasing as supplies (preorders, first run of consoles) decrease, the equilibrium price will go up but the quantity is indeterminate. The last article is about how the prices in student housing has gone down. Many real estate companies had high expectations for the need for student housing near campuses. However many developers have overshot the mark the demand for student housing just isn’t there. Families are still recovering from the recession and most students opt out of the luxury student lofts sprouting everywhere near campus. The expectations for higher end apartments led builders to produce more shifting the supply

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