Supply, Demand, & Elasticity
Supply, Demand, and Price Elasticity
Team A
Julisa Dincol
ECO/212
September 26, 2011
Osvaldo Miranda
Supply, Demand, and Price Elasticity
The very basis for economic stability is supply and demand. Variations in supply and demand influence a society’s excellence. As supply and demand alters, so does the cost and amounts of commodities. These variations in volume and price affect market stability. Factors that help influence the market equilibrium are substitutions. In turn, the substitutions affect the price and capacity of flexibility. Four market systems function within the role of the economy “Perfect Competition, Monopoly, Oligopoly, and Monopolistic Competition” (Hubbard and O’Brien, 2010). The economists play a large and complicated part within these industries. The team’s chosen commodity is sunscreen. The team assumes that this product operates within a market economy.
Supply and Demand One can identify several causes for shifts in supply and demand in regards to sunscreen. According to Hubbard and O’Brien, “When consumers increase the quantity of a product they want to buy at a given price, the market demand curve shifts to the right” (2010, p. 68). Sunscreen is mostly a seasonal item. Therefore, the demand for it increases as summer approaches. This is because the amount of sunlight during the day also increases and becomes more intense compared to the rest of the year. “When firms plan to increase the quantity of a product they want to sell” the supply curve shifts to the right (Hubbard & O’Brien, 2010). So most likely, a couple of months before summer an increase in supply will occur because firms will be producing more sunscreen. As summer comes to an end, there will be a decrease in the supply and the demand curve. The decrease in the supply curve will occur because the price of input may increase, and firms will be producing less sunscreen (Hubbard & O’Brien, 2010). A decrease in the demand
Team A
Julisa Dincol
ECO/212
September 26, 2011
Osvaldo Miranda
Supply, Demand, and Price Elasticity
The very basis for economic stability is supply and demand. Variations in supply and demand influence a society’s excellence. As supply and demand alters, so does the cost and amounts of commodities. These variations in volume and price affect market stability. Factors that help influence the market equilibrium are substitutions. In turn, the substitutions affect the price and capacity of flexibility. Four market systems function within the role of the economy “Perfect Competition, Monopoly, Oligopoly, and Monopolistic Competition” (Hubbard and O’Brien, 2010). The economists play a large and complicated part within these industries. The team’s chosen commodity is sunscreen. The team assumes that this product operates within a market economy.
Supply and Demand One can identify several causes for shifts in supply and demand in regards to sunscreen. According to Hubbard and O’Brien, “When consumers increase the quantity of a product they want to buy at a given price, the market demand curve shifts to the right” (2010, p. 68). Sunscreen is mostly a seasonal item. Therefore, the demand for it increases as summer approaches. This is because the amount of sunlight during the day also increases and becomes more intense compared to the rest of the year. “When firms plan to increase the quantity of a product they want to sell” the supply curve shifts to the right (Hubbard & O’Brien, 2010). So most likely, a couple of months before summer an increase in supply will occur because firms will be producing more sunscreen. As summer comes to an end, there will be a decrease in the supply and the demand curve. The decrease in the supply curve will occur because the price of input may increase, and firms will be producing less sunscreen (Hubbard & O’Brien, 2010). A decrease in the demand
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