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For example, new competing technology called an eventual fall in demand of video cassettes and an eventual reduction of the supply as a new equilibrium was reached. Now there are only a few VHS players and cassettes remaining on the market, while the amount of TiVo and DVR users has exponentially increased. But this took time as people replaced their systems and converted their libraries from one medium to the new medium.
The demand for some goods is more responsive to changes in prices than other goods. For example, food as a whole might seem like a very inelastic good -- people have to eat. But because there are so many substitute goods for a meal, within the category of food price is often very elastic -- consumers will respond to an increase in the price of restaurant meals by cooking at home.
The degree to which the supply curve can respond to changes in demand will vary with the product as well. For example, every great once and awhile there will be an extremely warm winter. Mittens and scarves will pile up in department stores, as producers cannot adjust their supply to a decrease in demand -- they must plan ahead how much winter clothing they will manufacture for the season....
Although they may slash the prices, there is only so 'low they can go' without taking a catastrophic loss, given the cost of the input materials. During a very cold snap, it is difficult to increase inventories of winter clothing by rapidly increasing production and shipping the goods to stores. However, if there is a very hot day an ice cream store can increase their supply to make more money off of the sharp increase in demand, and on a cool, rainy day, the store can simply leave the product in storage until the weather changes. However, if the entire summer is cool, or if people are not buying the product due to the recession and having ice cream at home, eventually the store must slash prices to sell the ice cream before it goes bad, will buy less in the way of inventory, and the supply will decrease (The market system, 2009, part 2)..
Works Cited
Economics basics: supply and demand. (2009). Investopedia.
Retrieved May 20, 2009 http://www.investopedia.com/university/economics/economics3.asp
The market system. (2009). Biz/Ed
Retrieved May 20, 2009
http://www.bized.co.uk/learn/economics/markets/mechanism/interactive/part1.htm
Works Cited
Economics basics: supply and demand. (2009). Investopedia.
Retrieved May 20, 2009 http://www.investopedia.com/university/economics/economics3.asp
The market system. (2009). Biz/Ed
Retrieved May 20, 2009
http://www.bized.co.uk/learn/economics/markets/mechanism/interactive/part1.htm
Supply/Demand The product being studied is the Prius, the hybrid car from Toyota. The automobile industry is one the largest industries in the world. The major players are Ford, General Motors, Chrysler, Honda, Mitsubishi, Hyundai, several European companies and regional players as well (Investopedia, 2011). These firms all contribute to intense competition among rivals, especially given the size of the industry. The result is an industry characterized by competition both along
Supply Demand Simulation Macro and Microeconomic Principles From the simulation, the two major microeconomic principles are supply and demand. The simulation majorly focuses on the supply and demand of rental properties in Atlantis. In addition, the influences on supply and demand form the major topic discussed in the simulation. The macroeconomic factors clearly stated in the simulation are changes in the population trend, choosing to rent or buy apartments and factors that
Price elasticity for this product was likely quite great, before the item was subsidized, as few consumers perceived it as a necessity. Only the costs of production limited the price elasticity, as the tanks are presumably not cheap to build. Of course, the government might protest that the product is a necessity, given the dire need for conservation, if Australia is to continue to have a sustainable source of
This means that the demand increase will produce an increase in supply at a controlled rate. d. How can you apply what you learned about the concepts of supply and demand from the simulation to your workplace? The simulation sheds particular light on the idea of adjusting pricing structure according to apparent market demand. This is useful to any workplace. In my case, the notion that large-scale external changes in the
Natural Gas Supply, Demand and Pricing Over the past 15 years there has been a significant transformation both in natural gas supply and natural gas consumption. Wellhead price deregulation has permitted natural gas prices to adjust freely to prevailing supply and demand conditions, and open-access transportation has allowed natural gas volumes to move freely from producers to consumers. As a result of industry restructuring, natural gas supply, demand, and prices are
Furthermore, it appeared that the consumption of alcoholic beverages among the youth increased throughout the three-year duration of the survey. In terms of the young females (in high school), the drinking path has been described as "an absolute disaster" (Fyfe, 2010). The primary explanation as to why alcopops became even more popular among the youth is given by the inability of the tax to impact the parents -- who in