S is for Supply

To whom it may concern,
After learning about demand, we swiftly moved onto the topic of supply, which only took us two days to cover. I already knew a lot about supply because of working in the student store, and all my other previous business classes. The only topic that I didn't know that much about was elastic and inelastic supply because we didn't go over that in any of my other classes. However, learning about the elasticity of supply made me understand the concept of supply even more because of what I had already learned before.
In this unit we learned all about supply (obviously), the law of supply, elasticity of supply, and the change in supply at each and every price. And ultimately how supply differs from demand. First, supply is basically just how much a product is supplied at each price. The law of supply is the opposite of the law of demand. In supply, as the prices go up, the quantity supplied also goes up because the business person has more of a motivation to sell it because they're getting more profit. So obviously if the price is $100 compared to $10, the business is going to supply more product at $100 because they're going to make more money out of it. The elasticity of supply is basically the same thing as the elasticity of demand. An elastic product is something that factories can produce in bulk, so they're very flexible if they ever need to produce a lot more because of the tastes of consumers. An inelastic product is something that factories can't produce in bulk. It's a product that takes a lot of steps to make, and if consumers all of a sudden demand more of them, it's very hard to produce them faster because they're just not made to work that way. The last thing we talked about with supply, was the change in supply at each and every price. This idea is relatively the same as demand, with the curves moving in toward zero and away towards zero, and the factors that control those. I'll talk about this more later when I give real life examples, because it's easier to explain.
So one example I wanted to give was for the elasticity of supply. First of all, an elastic example would be like when there's two football teams in the Superbowl, both businesses/factories can produce a ton of hats, socks, shirts etc. with the winning team name on it for both sides. So then when one of the teams wins, they have all those products already ready to go, while they just ship the losing teams' products elsewhere. An example of inelastic supply is like the iPhone. Think about it, it takes a lot of work and labor to make one iPhone. There's all kinds of machines that help out in the production and whatnot. So, they can only produce a certain amount at any given speed, so if they run out in the stores, it's going to take a while to completely restock again. This happened in Corvallis when the new iPhone 4S came out. It sold out within 2 hours of opening! An example of CISAEAEP is if a new machine comes out that produces buttons faster, then the company will be able to have a larger quantity of buttons at the same price which would shift the demand curve outwards. There are lots of real life examples like this, and lots of differing factors that can shift the supply curve either outwards or inwards. Where the supply and demand curve meet is called the equilibrium, or market price. Hypothetically, at the end of the day you should sell out of your product at that given price, and have no more people who want to buy it, but we all know that never really happens. For example, in the student store, we're constantly restocking all of our snacks so we never run out. We take inventory and price accordingly, but always restock at the end of each week. If we had to restock earlier than one week, then we know that we're not supplying enough because the demand of the product is higher than we expected!

D is for Demand

To whom it may concern,
Demand is quite an interesting topic. I learned a lot about it in Intro to Business, Marketing 1 and 2, and Advanved Business Procedures. Outside of school, I learned about demand just by being an active consumer in our society. I understood the point of a bargain, and buying more of an item if it is priced at a lower price than usual. I also learned all about demand through my ABP class because I'm in charge of snacks at the student store, but I'll talk about that later when I give REAL LIFE EXAMPLES!!!!!!
In Economics this year, we talked about demand, the law of demand, price effect, demand curves, demand schedules, elasticity and inelasticity of demand, and environmental factors. Whew, that's a lot huh? Demand is basically the desire and or willingness consumers have to buy a certain product. I learned about the boundaries of demand by explaining my dream car and house, which I soon realized was not practical because I'm pretty much the only person who demands that. Next, we talked about the law of demand which basically says the higher you price an item the lower the demand is going to be, and visa versa. I already knew this because if a tank top is $3 compared to $12, obviously more people are willing to buy it at $3. After understanding that concept, we drew lots of pictures of demand curves, making the price the y axis and the quantity demanded the x axis. The demand schedule is a just a table of the demand curve. One column is the price and the other column is the quantity demanded. Due to the law of demand, the demand curves are always sloping downward. After learning all of that we talked about elastic and inelastic demand. Elastic demand is when the price of a product goes up or down, then the consumers buy either less or more of that product. An example of this would be like a fruit roll-up, because if the price goes dramatically up, then people are going to stop buying them, because there are a lot of other products that could substitute for a fruit roll-up, and it's also not necessary for life. Inelastic demand is the exact opposite. That's when if the price of a product goes up or down, generally people are still going to buy the same amount of said product. For example, if the price of milk all of a sudden got drastically low, no one is going to buy a ton of milk because it would go bad. And if the price went way far into the clouds, people still need, so they're still going to buy the same amount. LASTLY, we learned about how environmental factors can change the demand for a certain product. One of the environmental factors was income, so if your income all of sudden goes up, there's going to be a higher demand for basically everything because everyone has more money to spend on products. Another environmental factor was population, so if there was another baby boom, then obviously the demand for diapers, baby food, baby formula, etc. would raise a ton.
Now for connections with the real world. Well, I've already given several examples in my last paragraph, but I'm willing to enlighten you with more of my knowledge. One thing I haven't talked about already are complementary and supplementary products. Complementary products are products that go together, so the demand for both products rises and falls together. An example of this is hot dogs, hot dog buns, napkins, paper plates, chips, soda, etc. Supplementary products are products that come hand in hand, so either one or the other, and the demand for each is like a scale. An example of these kinds of products are tea and coffee, so if all of a sudden there's a shortage of coffee beans, then more people are going to start buying tea as a substitute for the lack of coffee. Also, I learned a lot about demand through my ABP class. I'm in charge of all the snacks at the student store. I have to take inventory of all my products at the end of each week so I know what kinds of products are being sold and which aren't. Then I have to decide why they are either selling or not selling. Some has to do with what the cafeteria sells (SUPPLEMENTARY demand) and some has to do with pricing, which I'm sure is our next lesson in class. Okay that's enough, I'm sure you've learned enough about demand, because I know I sure have!!