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The document discusses the interplay between demand and supply and how it impacts businesses and customers. It defines demand and supply, and explains how factors like consumer preferences, income levels, production costs, and technology influence them. It also describes how tariffs can impact both demand and supply shifters by changing the price and availability of imported goods. Finally, it explains how the relationship between demand and supply affects businesses through increased or decreased sales and profits, and customers through higher or lower prices and product availability.

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Angel Vanzuela
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© © All Rights Reserved
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Download as DOCX, PDF, TXT or read online on Scribd
19 views

Purcom Script

The document discusses the interplay between demand and supply and how it impacts businesses and customers. It defines demand and supply, and explains how factors like consumer preferences, income levels, production costs, and technology influence them. It also describes how tariffs can impact both demand and supply shifters by changing the price and availability of imported goods. Finally, it explains how the relationship between demand and supply affects businesses through increased or decreased sales and profits, and customers through higher or lower prices and product availability.

Uploaded by

Angel Vanzuela
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Our presentation is about Analyzing the Interplay: A cause-and-effect relationship of

demand and supply on businesses and customers. In this presentation we will explore
the intricate dynamics between demand and supply in the business world and how it
impacts both businesses and customers.

- Intro: Demand and Supply


Before delving into the interplay, let's define demand and supply.

● Demand refers to the quantity of a good or service that consumers are willing
and able to purchase at a given price and time.
● Factors such as consumer preferences, income levels, and population size
influence demand.
● By analyzing demand patterns, we gain insights into consumer behavior and
market trends.
● Supply refers to the quantity of a good or service that producers are willing and
able to offer at different price levels. (Supply is the total amount of a good or
service available for consumption)

● Factors like production costs, technological advancements, and government


regulations affect supply.

● (Production Costs- is the total price paid for the resources used to manufacture a
product or create a service.)

● (Technological advancement- how advance the technology that you are using to
produce and keep up with the demand; the more advance your technology is
using the more supply you can produce at a small amount of time.)

● Understanding supply dynamics is crucial for assessing market equilibrium and


predicting price changes.

Law of Supply and Demand


The law of supply and demand combines two fundamental economic principles
describing how changes in the price of a resource, commodity, or product affect its
supply and demand.
As the price increases, supply rises while demand declines. Conversely, as the price
drops supply constricts while demand grows.

Higher prices cause supply to increase while demand drops. Lower prices boost
demand while limiting supply.

CAUSES

- Demand Shifters : Behavior of Consumers and sa book

● DEMAND SHIFTERS- is the variables other than price of good influence


demand.
o For example, the number of pairs of jeans individuals are willing and
financially able to buy also depends on the consumer income.
● Several factors impact demand, including consumer preferences, income levels,
competition, and economic conditions. (adlib…)
Understanding these factors helps businesses forecast and respond to changes
in demand, ensuring they meet customers' needs effectively.

- Suppy Shifters (side of the businesses/ producers)

● SUPPLY SHIFTERS- Variables that affect the position of the supply curve. They
include the prices of inputs, the level of technology, the number of firms in the
market, and producer expectations. Whenever one or more of these variables
changes, the position of the entire supply curve shifts. Such a shift is known as a
change in supply.
● Similarly, supply is influenced by factors like production costs, availability of
resources, technology, government regulations(), and competitor actions. These
factors shape the ability of businesses to provide goods and services to meet the
demand.

These demand and supply shifters are affected both by Tariff.

So first let us define what is tariff,

● Tariffs are taxes imposed on imported goods and services. They are designed to
protect domestic industries and regulate international trade. Tariffs can be
specific or ad valorem, and they affect the cost and availability of imported
goods. By altering the price dynamics, tariffs influence both supply and demand
in the market.
● On the side of Demand shifters
Tariffs influence consumer behavior by altering the price and availability of imported
goods. Higher prices may reduce demand for imported goods, as consumers seek more
affordable alternatives. However, tariffs can also stimulate demand for domestic goods,
as they become relatively cheaper compared to imports.

● On the other hand, In relation to the government regulations factor of


supply shifters, the business are required to pay tariffs or tax on the products
that they importing to our country.
● Tariffs can disrupt the supply chain by increasing the cost of imported inputs,
which affects the production process. Higher costs may lead to reduced supply,
as businesses may find it challenging to maintain profitability. Additionally, tariffs
can incentivize domestic production, leading to increased supply of domestic
goods.

Effect sa Entity and Customers

● BUSINESSES- The interplay between demand and supply significantly affects


businesses. A surge in demand can lead to increased sales and profits, while a
decline in demand may result in excess inventory and financial losses.
Businesses must carefully monitor and respond to changes in demand and
supply to remain competitive.
● CUSTOMERS- Customers are directly influenced by the interplay between
demand and supply. High demand often leads to increased prices and potential
scarcity, while low demand can result in lower prices and availability.
Understanding these dynamics helps customers make informed purchasing
decisions.

CONCLUSION: In conclusion, the relationship between demand and supply is intricate


and has a profound impact on businesses and customers alike. By analyzing this
interplay, businesses can make strategic decisions to meet customer needs effectively,
while customers can make informed choices based on market conditions.
Understanding and managing the cause and effect relationship of demand and supply is
crucial for long-term success in the dynamic business environment.

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