Topic Paper 1:
Factors That Will Be Affecting the Demand
And Supply For Products
Dr. John A. Machnic, Phd
In Partial Fulfillment of the Requirements of:
Summer 1, 2013
Demand is described as the ability and the willingness to buy a specific quantity of a product at a given price (Grant, 2002). The demand curve is downward sloping and varies inversely with price. Price changes cause a movement along the demand curve while changes in the factors that influence demand cause a movement of the curve itself.
Supply ...view middle of the document...
The factors at play are as follows:
1. The inclination towards both parents working and the rising amount of self-sustaining single parent families means that there is less time for cooking (Shafi, 2005). Why go through the pain of buying the potatoes, peeling them, cutting them to appropriate size and then stand by the stove to watch them fry when you can buy a box of ready to serve French fries that only need to be fried? Hence, pre cooked and/or laminated foods offer time saving and ease.
2. Falling income levels and job losses given the current recession means that people are going to be saving as much as possible on household services like maids and cooks (The Economist, 2009). In this respect, convenience food makes life easier for housewives. Even unmarried couples are going to find convenience food a fresh life for their pockets as it helps them to avoid eating at restaurants that effectively charge higher.
FACTORS THAT WILL BE AFFECTING the DEMAND FOR PRODUCTS
PURCHASED OVER the INTERNET IN the NEXT SEVERAL YEARS
Demand for products purchased on the Internet is expected to rise considerably over the next few years, which will make the demand curve shift upwards and to the right from D0 to D1. Examples include buying groceries online at Tesco’s virtual store. The factors at play are as follows:
1. Falling income levels coupled with higher economic and social costs (like high oil prices coupled with environmental degradation as a result of pollution from transportation) is going to make purchasing over the Internet a welcome alternative (The Economist, 2009).
2. The success of certain types of retailers in the “e-tailing” genre (for example Amazon.com selling books) and given the current recession and the need for organizations to become more cost efficient will lead to more and more organizations styling themselves as internet based retailers. This will, as in the case of books, significantly increase competition leading to the closure of many traditional retailers like bookshops. Hence, Anderton (2002) states that the changes in the composition of total supply will change the demand situation.
Factors that will be affecting the demand for films and Cameras in the next several years:
Demand for film and cameras is expected to decline considerably over the next few years, which will make the demand curve shift downwards and to the right from D0 to D1. While there are no prominent manufacturers of camera and films of British origin, as an example, a large part of the manufacturing / distribution of traditional films and camera in the UK is done by Fuji Films (UK) Limited and Canon (UK) Limited. The factors at play are as follows:
1. Technological advances in the shape of digital cameras offering higher image quality and more ease for the user are expected to lead to a consequential decline in demand for films and cameras.