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Supply And Demand

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❶A supply shock is an event that suddenly changes the price of a product or service.


Essay: Economics – Supply and Demand
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In such a situation, the consumption of salt is getting to be unregulated and practically unlimited and as the article warns salt is still not on the list at the FDA while its danger is obvious for specialists and as statistics reveals such an unregulated consumption of salt may and actually leads to lethal outcome for numerous unnecessary deaths. Furthermore, the situation is dramatically aggravated by the fact that customers often remain uninformed about the danger of salt and its over-consumption.

Moreover, even if some customers are conscious of this threat they cannot really do anything about it because as a rule they are deprived of a possibility to get the full information about the ingredients of food they consume daily.

As a result, the problem remains and the situation is deteriorating but its solution is not found yet. In such a situation, the disturbance of specialists and journalists about the passiveness of federal agencies such as FDA, for instance, is not surprising. Obviously, in order to solve this problem it is necessary to undertake certain steps but still it is necessary to realize that all parties involved should participate in the solution of this problem.

To put it more precisely, the government and federal agencies cannot order people to consume salt or not as well as consumers cannot refuse immediately from the consumption of salts, especially in the situation when there is practically no alternatives to this essential product.

As for food companies, they cannot stop use salts because it often makes their products tasty, better saleable, and finally, consumers get used to it and demand on salt and salt consisting products is extremely high.

As a result, companies cannot and are not really willing to change the situation. Obviously, to a significant extent such unwillingness is caused not only by high demand but also by the lack of stimuli whether positive or negative to refuse from salt use in such quantity.

This is why it is primarily necessary to stimulate companies to reduce the use of salt in their products. Naturally this may be done in different ways from development of a taxation stimulating food companies to use lower amount of salt, to strict limitations of salt use in all products.

Consequently, it is necessary to develop programs, including educational ones, which would inform people about potential danger of unlimited consumption of salt.

Finally, it is hardly possible to believe that Americans as well as any other people in the world would totally refuse from salt or limit its consumption significantly.

This is why, another essential measure to decrease salt consumption, and actually stop salt wars between food companies, scientists and government, is the development of new products that could substitute salt. Demand for coca cola is also influenced by the change in price of relative goods. In case of coca cola there are number of substitute goods available in the market, we have Pepsi, Miranda, limca, spirit, etc. Taste and preferences of the consumers also influence the demand to greater extent.

In case of coca cola, if there are hard core consumers who prefer the taste of coca cola, even if the price of coca cola increases, the demand will remain the same. But if the consumers have no taste or preference of coca cola, then if the price increases the demand decreases.

As a result consumer was shifting from coca cola to other natural drinks so therefore the demand for coca cola decreased. TIME Time is an important factor that affects the demand of coca cola e. When the demand for product increases, price being constant, due to change in other factors e. From this figure we can see that when the income of the consumer increase in the future then the demand for coca cola increases. It states that if the price of a product increases, quantity supply will increase as the supplier will be willing to supply more to earn more profit.

The law shows that there is a positive relationship between price and quantity supply. This show as the prices increases the producers are willing to supply more to earn more profit. In case of coca cola this holds true as the price of coca cola increases there will be increase in supply upto a certain level as there are other constrain like easy availability of closed substitute.

In the long run if the producer continuously increases the price of coca cola then the demand for coca cola will fall down because of various substitutes available in the market. As stated in the law of supply, the price is positively related with quantity supplied for coca cola, in short run if there is an increase in the price of coca cola, the producers will be willing to produce more of the product. In the case of coca cola there are large number of consumer, as a result the supplier are willing to supply more to cater the needs for the large number of customer.

Includes labour cost, machinery etc. Shift in supply curve means change in quantity supplied due to others factors while price remains the same. Upward shift takes place when the supplier is able to supply at less at a same price. Downward shift takes place when the suppliers are willing to supply at same price. Price elasticity is found to be relatively elastic.

This means if there is small change in price lead to the big change in quantity demanded. Therefore we can say that coca cola is elastic in nature and its elasticity for demand is more than 1. In the case of coca cola substitutes are easily available in the market. The market is already flooded with many aerated drinks.

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The theory of supply and demand explains how the price and quantity of goods sold in markets are determined. The supply and demand theory is simple and makes sense. People act in there own self interest, and want the best quality at the lowest possible price. The tension between competing producers /5(17).

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Supply and Demand essaysSupply and Demand; The Primary Controls in a Free Market System A free market system is the basis for supply and demand. Throughout history the base concept of supply and demand has not changed a great deal. Only through the evolution process of this economic system have we.

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Sample marketing essay about Supply and Demand on the example of salt: danger of salt and its over-consumption. - Supply and Demand Supply and demand is defined as the relationship between the quantity that producers wish to sell at various prices and the quantity of a commodity that consumers wish to buy. In the functioning of an economy, supply and demand plays an important role in the economic decisions in which a company or individual may make.