In the world of economics, the two main recognizable concepts are supply and demand. These two simple lines influence the factors in the free market. This paper examines how the laws of supply and demand influence the process of reaching market equilibrium for USB flash drives. Law of Supply
The law of supply states that, “other things equal, firms will produce and offer for sale more of their product at a high price than at a lower price” (McConnell, Brue, & Flynn, p. 54). The basic determinants of supply are (1) resource prices, (2) technology, (3) taxes and subsidies, (4) prices of other goods, (5) producer expectations, and (6) the number of sellers in the market (McConnell, Brue, & Flynn, p. 52). Gone are the days of floppy disks and rewritable cds because USB flash drives have taken over. “A USB flash drive is a data storage device that consists of flash memory with an integrated Universal Serial Bus (USB) interface. USB flash drives are typically removable and rewritable, and physically much smaller than a floppy disk. Most weigh less than 1 oz. USB flash drives are often used for the same purposes as floppy disks or CD-ROMS. They are smaller, faster, have thousands of times more capacity and are more durable and reliable because of their lack of moving parts” (Wikipedia, 2011). When USB flash drives first hit the market they were expensive and many consumers didn’t know what they were used for and only one company produced them. As time went by, more consumers realized how useful and convenient they were and they started buying them at high prices.
Law of Demand
The law of demand states that, “other things equal, the quantity of a good purchased varies inversely with its price” (McConnell, Brue, & Flynn, p. 51). The basic determinants of demand are (1) consumers’ preferences, (2) the number of buyers in the market, (3) consumers’ incomes, (4) the prices of related goods, and (5) consumer expectations (McConnell, Brue, & Flynn, p. 48). The demand......
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