Case Study on Demand and Supply

Demand and Supply Case Study:

Demand and supply is the objective economic law which defines the interdependence between the indicators of supply and demand of the products on the market and their price. The main idea of the law is that if the price on the product is law, more people become able to purchase it (the demand increases), but the readiness to sell it (supply) reduces. The law is quite simple and natural and reflects the real picture of the relations on the market between the salesmen and customers. It is obvious that if the product is cheap, more people will be able to pay for it, but salesmen do not want to waste time on the sale of the cheap products and the supply becomes low.

On the contrary, if the product is expensive, more salesmen become eager to earn money and the supply increases, but the customers are not always ready to purchase expensive goods and services and the demand reduces.

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The indicators of the supply and demand play a very important role on the global economics and the choice of an individual. The price depends on its popularity and if the salesmen notice that the product is popular, they will set high prices in order to earn much money. So, since the time immemorial the salesmen bought products for the lowest price in the regions with the highest supply and sold these products for the highest price in the area, where was deficiency of these goods and services, because people did not have the choice and had to buy the required products for the expensive prices. This law is relevant even nowadays and the global economics exists on its principles.

Demand and supply are the main indicators which influence the rates of prices and it is important to know about it everything. Preparing a demand and supply case study the student must know everything about the law in order to be able to analyze the problem from all sides and draw the objective conclusions. The student is obliged to learn about the factors which have caused the problem and its consequences. One should research the case site, collect facts and evaluate the problem professionally paying attention to the indicators of demand and supply and solve the existing problem alternatively.

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