Business

Supply, Demand and Price Elasticity

There are many dissimilar things that go hand and hand with one another, and one of them is supply and demand. Supply and demand are reliant upon each other because of the change in supply curve, demand curve and price and quantity. The two most principal factors are price and quantity, because when the price goes up the supply demand will go down, and when the price goes down the supply demand goes up. Most consumers are more anxious as to where they can find the cheapest product. When the supply and demand balance out each other then the equilibrium of supply and demand will be met (Hubbard & O'Brien, 2010) .Ten commodities that I use daily are coffee beans, salt, wheat, cloth, cars, water, cigarette, TV, gas and medication.

Causes for shifts in supply and demand for coffee

The admission of Vietnam into the coffee bean business caused an increase in supply and a rise in the quantity supplied at any specified price. The increase in supply shifts the supply curve to the right. Another example of supply shift could be Chinese textiles sold on the world market without being subject to quotas after 2005. In the early 1960s the US, the EU have forced most developing countries to impose export quotas on most kinds of textiles and clothing (this was called “Multi-Fiber Agreement”).The aim was to protect Western textiles producers. This agreement stayed in force till 1994. WTO initiated end to Multi-Fiber Agreement in 1995-2005, transition period to cut quotas. Under the Agreement, WTO Members have committed themselves to remove the quotas by 1 Jan 2005, integrating the sector fully into GATT rules of nondiscrimination.