A change in demand is usually as a result of changes in one of determinants of demand. A shift in demand is caused by any variable apart from price. A change in quantity demanded is a relative, but distinct concept. Changes in demand are changes in the entire price-quantity relation, which constitutes demand curve. This implies that a different quantity demanded is a pair with a specified demand price or that the quantity demanded is paired with different demand price. The consequent of this repairing of quantities and prices is a shift, or repositioning of the demand curve. The five determinants of quantity demanded include income, preferences, other prices, expectations and number of buyers (Birn & Forsyth, 2002). The Price Level 1: the demand of coffee remained constant while the supply increased which resulted to a fall in the coffee price. This overproduction was caused by higher coffee prices, which was experienced in the previous years. The Price Level 2: many gourmet coffee houses were reopened and began branding their product to attract consumers. However, the branding was characterized by higher process and target high income earners, which resulted to a fall in demand. The fall in demand can be a result to an increase of quantity supplied in the market, a factor that drastically reduced the market prices (Mulder & Martins, 2004). The Price Level 4: the prices were rising above the equilibrium price following the strengthening of market prices and poor weather, which resulted to shortage in the supply of coffee below the market demand. This resulted to an increase in the level of quantity demanded in the market.
In macroeconomic terms, supply is the quantity of a product that producer are able and willing to supply in a given period at a given price in the market. As the price of a commodity increases, producers expand their market supplies. The supply curve is a relationship between the quantity a firm is willing and willing to sell and its respective prices. On the other hand, aggregate supply is the overall supply of good and services that a firm within a national economy plans to sell during a specified period of time. According to macroeconomics, aggregate demand is the overall demand for a finished product in the market at a given price level within a specified time. This is the quantity of goods and services within an economy, which will be purchased at all possible levels. It is the demand for gross domestic product (GDP) of an inventory when levels of an inventory are static. On the other hand, demand is a principle in the economics, which describes a consumer’s willingness and desire to pay a specified price for a good or service. Demand is the quantity of a product or service that the buyers desire. Quantity demanded is the level of a product that buyers/consumers are willing and able to buy at a specified price. In addition, the relationship between quantity demanded, and the price is referred as demand relationship and illustrated using a demand curve (Birn & Forsyth, 2002). Hurricane Katrina struck the center for recreational and commercial fishing, which produce a large quantity of fish consumed in the United States. This resulted to an increase in the demand following a shortage in supply of fish. Because of this, consumers were willing to pay more, and consequently, the prices for fish rose higher (Mulder & Martins, 2004). Following the discovery of microchip, personal computers became affordable because of the increased market supply. This was because of a reduction in the production costs. Many manufacturers were able and willing to supply more computers, which resulted to a decrease in the market prices. In the previous years, polyester suits were highly regarded and fetched higher prices in the market. However, fewer consumers were willing to pay more which resulted to a decrease in the demand for such suits. However, the decrease in demand resulted to a slump in suits’ prices. Recently, the suits have become trendy, and many consumers are willing to pay the market prices, a factor that has contributed the increase in supply (Birn & Forsyth, 2002). The internet access is becoming more popular than before with many people willing to use them. This is because of an increase in supply characterized by a decrease in market prices.
As a developing country with an interest of protecting its market, Import licensing is one of the most common nontariff barriers that can be used or restricts imports, and it is maintained by import licensing requirement. The government can also provide other domestic support and several export subsidies to make domestic industries compete with the emerging investors. Exporters are not subjected to local manufacturing tax with export earning also being exempted from taxes. Domestic support acts as a direct barrier against accessing the domestic market while export subsidies displace exports from other countries into the country. The government also allows price preference for local importers in government contract, which discriminates against foreign suppliers. Domestic companies get a price preference in government purchases and contracts in International Competitive Bids (ICB's) and international purchases (Salvatore, 2002).
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