Reply to Daniel’s Respond
Hello Daniel.
You have handled the question well. I want to add a point to your definition of the law of supply and demand. The law defines the effects of the relationships between demand and supply to the price of a product. When there is a high demand than the supply of a commodity, the price goes up. The reverse happens when there are low demand and high supply.
As you have put it, individual demand is the demand for a product by one person or a firm. Market demand, on the other hand, is the total quantity demanded by all consumers. You have differentiated the two well; the elasticity of individual demand does not affect the price as the elasticity of the market demand. Investors always anticipate for the least elasticity rate of their market demands, so that the demands stay relevant.
Lastly, about individual supply and market supply, it would be better if you gave a more elaborate difference between the two. Individual supply is the supply of an individual producer, while market supply is the supply of all individual suppliers in the industry.
Generally, you have good work. Thank you for sharing Daniel.
Reply to Tom W’s Respond
Hello Tom.
I support your argument on the law of demand and supply. If the price of goods is kept constant, supply and demand behave in antagonistic ways. An increase in demand causes a corresponding decrease in supply and vice versa. We also note that individual demand does not affect the price of a product in the market. The same happens with supply. Individual supply does not affect the entire supply in the market. On the other hand, market supply and demand affect the price of individual products in the market. Individual supply and demand rely on market supply and demand.
You have brought out the aspect of demand and supply chain very well with your two examples. Every time Play Station has an update, and there is increased demand for the commodity and low supply. For this reason, the price is always very high. The same happens with Xbox. At the onset of the pandemic, most people did panic shopping. There was a very high demand for toilet paper, toilet towels, and sanitizers. Since the markets had a limited supply of the products, they had to increase the prices because they were not expecting the virus. This was done to prove the supply and demand law.
Thank you for sharing Tom. You have done a great job.