|
|
Supply and Demand Paper |
XECO/212 |
Joe, Lisa |
12/11/2013 |
Choose one good with which you have had experience purchasing:
New home
New car
Vacation to a theme park
Washing machine
Computer
College
Other
Write a 700- to 1,050-word paper explaining factors that affect supply and demand. Include the following:
Explain factors that could cause possible changes in supply and demand.
Determine at least two substitutes there may be for your product.
Determine at least two complements there may be for your product.
Explain how the necessity of your chosen good impacts price elasticity
Format your paper consistent with APA guidelines.
Supply and Demand Paper
I chose to discuss the factors that affect supply and demand in regards to a new car since I have purchased many new cars in the past, and am currently in the process of shopping for a new car again.
There are several factors that can impact supply and demand of vehicles. First, the supply can be affected by the availability and cost of raw materials. When the cost of materials goes up, so does the cost of building the vehicle. In turn, the prices may go up, or the supply may go down. If certain materials are not available and there are no substitutes, then the supply will certainly drop. One factor that can have a significant impact on the demand for new vehicles is the price of oil. If the price of oil is high, then the price of gasoline will also go up. When people are spending more money on gas to commute, they tend to look at ways to save. One of these may include keeping their old car instead of investing in a new vehicle. If the extra payment of the new vehicle is more than what the gas savings would be, most will opt to keep the old vehicle until gas prices drop back down.
In certain areas there may be a substitute to buying a vehicle, but in other there may not be another option. In metro areas people may choose to utilize public...