Effects of Demand and Supply on Commodities

Feb 3rd, 2012
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We can see that when the income of potential buyers is low they demand is at 5,000 units hence the price of an A-phone is 2,000 pounds however with increase income the demand for A-phone increases to 10,000 units and the price for one A-phone reduces to 1,000 pounds.

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Effects of Demand and Supply on Commodities PaperStudent's NameAffiliationEffects of Demand and Supply on CommoditiesPart I Section 1If the level of income of potential buyers increased, then the demand for A-phone will go up and as a result the cost of purchasing an A-phone will go down.Using an arbitrary linear equation we can graph the effects of such changes;Y=-1/5X+3 X510Y21KEYX-axis represents demand in thousandsY-axis represents Price in thousandsWe can see that when the income of potential buyers is low they demand is at 5,000 units hence the price of an A-phone is 2,000 pounds however with increase income the demand for A-phone increases to 10,000 units and the price for one A-phone reduces to 1,000 pounds.Section 2If the A-phone is found to possess potential health hazards the demand for an A-phone reduces and the cost of an A-phone appreciates.Using the same linear equation as in section 1Y=-1/5X+3X510Y21KEYX-axis represents demand in thousandsY-axis represents price in thousandsWe can see that when A-phone is no associated with any health risk the demand is at 10,000 units at a price of 1,000 per phone.

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