W2 Supply and Demand report.docx - Supply and Demand report...

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Supply and Demand report SUPPLY AND DEMAND REPORT JOSEFINA DAVIS BA-161-4A-77 Principles of Macroeconomics (Online Undergraduate) Instructor: Alan Beideck
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W2 SUPPLY AND DEMAND REPORT 2
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W2 SUPPLY AND DEMAND REPORT 3 Supply and Demand report In terms of supply and demand, is price the only thing that matters? Not at all when it comes back to scarcity. Scarcity is when resources in the world are limited, however peoples wants are very unlimited. So, what can we do to demonstrate these wants and needs? Graphs! Supply and demand graphs are there to represent shifts in supply and shifts in demand. Mateer, D., & Coppock, L. (2017) Supply Five variables can cause a shift in the supply curve. They are the cost of inputs, technology/or production process, taxes and subsidies, number of firms in the industry, and price expectations. Inputs are supplies used in the production process. These inputs include employees, equipment, raw materials, buildings, and capital goods. If the price of inputs rises, the cost of producing the product increases. Moreover, accordingly at each price producers require selling their good for the higher amount of money. Therefore, an increase in the price of inputs leads to a decrease in supply. Mateer, D., & Coppock, L. (2017) The input from technology usually comes from the knowledge of the technology. Technology improves production so that the producer can increase the output. So, with the increase, the firm can provide more supply to the consumer. This improvement will cause the supply curve to shift to the right. Mateer, D., & Coppock, L. (2017)
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W2 SUPPLY AND DEMAND REPORT 4 Now in the taxes and subsidies arena, the taxes imposed on firms, of course, is an added cost to the production costs. These higher costs may not motivate the firm to want to produce large amounts of supply to the consumers. Taxes can cause the supply curve to shift to the left.
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