Only available on StudyMode
  • Download(s) : 33
  • Published : February 24, 2011
Open Document
Text Preview
The cosmetic company Coty is rising in the economic world. This article focuses on the different ideas of supply and demand of Coty cosmetics. Coty moving into China and expanding their market demonstrates this through the article.

Demand is the amount of some good or service, which an individual consumer is willing or able to buy in a period of time. Which also implements The Law of Demand, or when the price increases, the quantity demanded decreases. As Coty grows as a market internationally, the demand and want for it increases because of market size. Market size is an example of one of the determinants of demand. There are five determinants, consumer tastes and preferences, market size, income, prices of related goods, and consumer expectations. Depending on the situation, these will either shift the demand curve to the right, increasing demand, or left, decreasing it. The rapid growth of a market results in an increase of price because of the amount of individual households and their producer expectations and also the price of relevant resources. These two determinants affect the supply curve instead of the demand curve. Like demand, supply has multiple determinants. These determinants are technology, prices of relevant resources (inputs), prices of alternative goods, producer expectations, and competition (number of producers selling the same product). Supply, is the quantity producers are willing and able to sell at a given price. In this article, because of the increase in demand of cosmetics, the supply will end up decreasing because of the price of relevant resources and producer expectations. The graph below shows the original equilibrium (E1) of Coty’s cosmetics before setting into China’s market of cosmetics. Equilibrium is equality between demand and supply, or where quantity supplied is equal to quantity demanded. This also maximized both utility and profit for both consumers and producers. Also, the graph shows an almost horizontal...
tracking img