TOPIC - Demand and supply of a product of your choice and factors that affect the demand and supply...

Question

TOPIC - Demand and supply of a product of your choice and factors that affect the demand and supply sides of the market.

Structure-

· Introduction – which topic 200 words

· Body- Discuss the topic in the article and with some theory -700 words

· Conclusion 100 words

Note

-There is no need to explain the theory/concepts in the essay on its own

- More marks for application and your comments on the topic

- Table of content.

- Refrences 6-8 (harward style)

-You need to provide a link to the article with your essay.

Robert · Accepted Answer

Demand and Supply of Cars 
Cars are one of the most popular good in the market with a major chunk of population having 
a car. The market of automobiles is highly fluctuating and the market demand and supply 
depends on a lot of factors such as the oil prices, interest rate, income etc. Demand and 
supply of cars is highly price elastic. Any change in the prices will affect the demand and 
supply of cars. Any change in its substitutes or compliments also greatly affects its market. In 
economics, supply and demand describes market relations between prospective sellers and 
buyers of a good.  
The demand for a good is the quantity of the good that consumers are able and willing to buy 
at each price over a period of time, ceteris paribus. When the demand for private cars rises, 
whether the price or the quantity will rise by a larger proportion will depend on the price 
elasticity of supply. The price elasticity of supply of a good is a measure of the degree of 
responsiveness of the quantity supplied to a change in the price, ceteris paribus. The supply 
of private cars is likely to be price elastic as the production time is likely to be short given 
that they are mass produced on assembly line which is highly automated. Therefore, the 
quantity is likely to rise by a larger proportion than the price. 
The demand of car depends greatly on its complements such as Petrol. The change in demand 
of cars with respect to the change in price of petrol can be calculated using cross price 
elasticity. Since the cross elasticity of demand for private cars and petrol is negative, the rise 
in the price of private cars due to the decrease in the supply will lead to a decrease in the 
demand for petrol.  
The consumers income also plays an important role in the demand of any good. In case of 
cars when the income of a household increases the demand of cars is bound to increase, as 
higher income will lead to higher consumption. Cars are considered luxury so generally 
individuals opt for a car only when they have sufficient income.

TOPIC - Demand and supply of a product of your choice and factors that affect the demand and supply sides of the market. Structure- · Introduction – which topic 200 words · Body- Discuss the topic in...

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