What Influences the DEMAND and SUPPLY?

Factors Influencing the Demand and Supply.

Demands

• Trends

• Fashion
• Fashion changes every season. New clothes will be produced, and we, the consumers, would want to buy it. 
• So, the demand would obviously increase.
• Cars
• It goes the same for cars.

• Change In Income
• When our income increases, the demand of buying something also increases.
• When the income decreases, the demand also decreases.
• Expectations

• Expectations in terms of the future prices.
• When people expect the future prices, the demand tends to increase.

• Price Of Related goods
• Substitutes
• Things that can be substituted with another product. Such as:

• Tea can be substituted with coffee.
• The demand of customers for tea would increase, which means that the demand for coffee would also increase.

• Complements

• Things that can go with each other. Such as:
• Petrol consumption and Cars.
• When the price of petrol increases, the amount of cars that people demand will decrease.
• It is because the more cars we have, the consumption of petrol that we use is higher, the price would also increase.

Supply

• Resource prices (raw materials)

• Raw materials can be affected by the natural disasters. It can cause the amount of raw materials consumed to decrease, when it decreases, the suppliers are unable to produce products.
• Causing the supplies to decrease.

• Technology
• Produce products faster or slower

• With the uses of current technologies such as machines used in factories, causes the process of creating the products to be faster.
• The faster the products are produced, the amount of supplies would increase.
• Such as, 120 of cupcakes are produced in 1 hour. Imagine the number of cupcakes produced in 3 hours. The amount of supplies increases.

• Taxes
• When the taxes gets high, the products produced by the suppliers will increases, means the supply decreases.