Changes In Supply And Demand

Economics is defined as "the study of how human beings coordinate their wants and desires, given the decision-making mechanisms, social customs, and political realities of the society." (Colander, 2004: Economics) The wants and desires of individuals or groups are determined by the supply and demand factor, which in turn affects the price. What ever the latest trends in a society are is determined by the wants and desires of individuals.

While reading the article Supply, Demand, and the Invisible Hand (Infoplease.com) it was dealing with how the supply of beef can affect the cost. It is found that when the supply of beef is in abundance, then this in turn will lower the price to the consumer. Adversely, lowering the cost of the product will usually increase the demand for the product. When the demand is great the price will increase because increase demand may result in a scarcity of the product.

Along with price other factors may affect the cost of a product. When the economy is good and individual's income levels are increasing then he or she may be willing to pay more for products he or she desires. New technological inventions can also be a catalyst for how supply and demand will be affected. The invention of new and innovative means of improving the production of a product can lead to a shift in the supply; therefore, the increase in supply will be evident. Likewise, slow technology growth or supplies in low numbers can lead to a decrease in supply. Although, this was not discussed in the article the thought of mad cow disease comes into view. With the scare of mad cow disease the supply of beef increases due to consumer fear of being affected. This in turn led to a decrease in the price of beef in order to decrease the supply. When consumers overcame his or her fear of the disease the demand increased and the supply decreased. If a demand curve was created it would show how when the price goes up the demand goes down, and when the price goes down the demand goes up. The same goes for the supply curve, when individuals demand a product the supply increases,