Think about a product that you have purchased recently (e.g. soda, diapers, take

Question

Think about a product that you have purchased recently (e.g. soda, diapers, takeout meals, milk, shoes, manicure/pedicure, video game, etc.). Explain how the law of demand affected your purchase. Give specific examples of how the determinants of demand and supply affect this product (T-I-P-E-N and P-R-E-S-T). What happens to the demand curve and the supply curve when any of these determinants change? Give examples of scenarios that would cause a change in demand versus a movement along the same demand curve and supply curve for this product. Discuss the new equilibrium price and quantity that result from these changes. Can you demonstrate some of these changes graphically?

Explanation / Answer

I have chosen to write about purchasing a computer. There is such a variety of computers and with technology improving every day, many factors are encouraging or discouraging people to buy them. For example, when I bought my new computer I was very specific on what I was looking for in a new computer. I wanted a lot of memory, a very large monitor, and it had to have windows 7, and of course the price had to be reasonable. As a consumer, once I found a computer that had all these aspects, I purchased it without a second thought. There are factors that change the supply and demand curve for any good or service offered to consumers, this is what makes the manufacture know how much to sale and at what price.

There are many aspects that could affect the demand of computers, for instance there would be a greater demand for computers when college started up. Consumers would be more willing to buy because they need to have computers to complete their school work. You might see a negative change in demand when college is on summer break and students are not worried about purchasing a computer. The holidays would show an upward change in the demand curve, because of the purchasing of computers as gifts. The sales during the holidays would have consumers willing to buy computers. Factors could also positively and negatively affect the supply curve as well. Price of manufacturing, parts, delivery, sales, and productive capacity could all affect the supply curve. For example a manufacturer might not supply as many computers when the holidays are coming around, because the computers would be getting sold for way cheaper, therefore the supply would go downward. If a manufacturer was getting production done at a low price, they might supply more computers at a higher price to maximize revenue. In today

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