In contrast, to the above graphical representation and the law of demand assumption; if the consumers have advance information about the possible future increase or further increment in the price of cheese, consumers might purchase huge quantities of cheese depending on its durability. This will leads to artificial increase in demand for cheese despite its increase in price today.
This will be represented in the graph below : P s
D1 D2 Q
Therefore, a consumer will only respond to price, as price is the factor that influence the quantity demanded over certain period of time. schiffman and Kanuk (2007).However, the income and substitutes …show more content…
The change in consumer’s taste will lead to a shift in the demand curve . Also, a change in the producer’s technology will lead to shift the supply curve.
A change in consumers taste will have huge effect on demand for other products. This can be due to change constant advertising
Define the equilibrium for the market for cheese.
The equilibrium of market for cheese is the point at which the quantity demanded for cheese is equal to the quantity of cheese supplied.
The market combines the demand and supply curve to determine the equilibrium price because its balances the forces of demand and supply. The price at which quantity demanded and quantity supplied meet is referred to as equilibrium price. Also, the quantity demanded and supplied is known as equilibrium quantity.
Price £ (Per Unit) Quantity Demanded (Units) Quantity Supplied
(Units)
2.40 10, 000 500
3.40 7, 000 1000
4.40 6, 000 2000
5.40 5, 000 …show more content…
This will eventually leads to shortage of cheese. Consequently, the suppliers can increase their price and still maintain the loyal customers. This continues until the equilibrium price is reached.
What would happen to the supply, demand, quantity supplies, quantity demanded and the price in the market for cheese, if the price for wine increases? (The assumption here is that cheese and wine are compliments)
Griffiths and Wall (2008b) defines complement in consumption as the process whereby consuming of more of one product leads to the consumption of more of some other products; whilst producing more of one products automatically results in producing more of some other product.
Although, when the price of wine rises, the demand for cheese declines, because wine and cheese according to the assignment assumption are complements .Therefore, consumers will buy less cheese.
Even though, when the demand for cheese reduced, demand curve for cheese will shift to the left. However, the supply curve for cheese will remain the
This will be represented in the graph below : P s
D1 D2 Q
Therefore, a consumer will only respond to price, as price is the factor that influence the quantity demanded over certain period of time. schiffman and Kanuk (2007).However, the income and substitutes …show more content…
The change in consumer’s taste will lead to a shift in the demand curve . Also, a change in the producer’s technology will lead to shift the supply curve.
A change in consumers taste will have huge effect on demand for other products. This can be due to change constant advertising
Define the equilibrium for the market for cheese.
The equilibrium of market for cheese is the point at which the quantity demanded for cheese is equal to the quantity of cheese supplied.
The market combines the demand and supply curve to determine the equilibrium price because its balances the forces of demand and supply. The price at which quantity demanded and quantity supplied meet is referred to as equilibrium price. Also, the quantity demanded and supplied is known as equilibrium quantity.
Price £ (Per Unit) Quantity Demanded (Units) Quantity Supplied
(Units)
2.40 10, 000 500
3.40 7, 000 1000
4.40 6, 000 2000
5.40 5, 000 …show more content…
This will eventually leads to shortage of cheese. Consequently, the suppliers can increase their price and still maintain the loyal customers. This continues until the equilibrium price is reached.
What would happen to the supply, demand, quantity supplies, quantity demanded and the price in the market for cheese, if the price for wine increases? (The assumption here is that cheese and wine are compliments)
Griffiths and Wall (2008b) defines complement in consumption as the process whereby consuming of more of one product leads to the consumption of more of some other products; whilst producing more of one products automatically results in producing more of some other product.
Although, when the price of wine rises, the demand for cheese declines, because wine and cheese according to the assignment assumption are complements .Therefore, consumers will buy less cheese.
Even though, when the demand for cheese reduced, demand curve for cheese will shift to the left. However, the supply curve for cheese will remain the