Macroeconomics - Supply And Demand Term Paper Example | Topics and Well Written Essays - 1750 words

Macroeconomics - Supply And Demand - Term Paper ExampleDemand, in this context, refers to the quantity of goods and services, which are desired by consumers at any given quantify and price. For example, if the request for Laptops is said to be higher than that of Desktops, it means that majority of consumers in the market prefer buying laptops over desktops and hence those businesses dealing with these items would have to film stocking more laptops than desktops or otherwise risk making losses or minimal profits as a result of low sales. Supply on the other hand refers to the level at which producers avail their products to the market. In this context, if the supply of a commodity is insufficient, then it means that there would not be seemly in the market to satisfy the quantities needed by consumers (Thompson 18). In this paper, I impart discuss, in detail, factors that affect supply and direct for commodities. With regard to demand, I exit discuss factors such as price, whic h will be explained through a demand curve in order to illustrate the law of demand, income, and future expectations, which will show that customers may refuse to buy commodities in large quantities if they are aware of a possibility of a reduction in price inwardly certain duration of time. Tastes and preferences will also be discussed as having a short term influence on demand as they are submit to rapid change. Factors affecting supply as discussed herein will include prevailing market prices of commodities, illustrated through a supply curve, government policies and speculation.The law of demand states that the higher the price of a commodity, the degrade the demand and the lower the price the higher the demand. It therefore goes without saying that price is one of the most important determinants of demand (Krugman 25). Consumers will always consider foregoing expensive items in their budget especially if there are substitutes, which are selling at a lower price or simply due to opportunity cost. For