Download Supply and Demand Analyze how the law of demand applies to a

Supply and Demand
Analyze how the law of demand applies to a recent purchase that you made. Describe how the
product has changed in price and explain whether the price change is due to supply or demand.
Did the change in price affect your decision to purchase the item?
In this discussion post, we are asked to analyze how the law of demand applies to
a recent purchase, how the product has changed in price, and whether this change
is due to supply or demand. First, we must define what the law of demand is,
Amacher & Pate tell us, “The law of demand states that the quantity demanded of
a good or service in a given time period is negatively related to its price, ceteris
paribus.” (Amacher & Pate, 2013) We have learned that many things affect the
demand for a goods or service, and in my situation, this is not any different. My
wife was driving down a highway and happened across a large deer that felt an
urge to jump out in front of her, subsequently totaling her vehicle. As she was
working out of town, it was imperative that she quickly purchased a replacement
vehicle. This represents a high demand upon my family’s part. This led to a
situation where we were unable to comparison shop and work the dealers as much
as I would have preferred too. Had I been able to wait until the fall when the next
year’s vehicles arrived to the lot, there would have been a greater supply of
vehicles and the dealer would have needed to lower their costs to reduce the
excess, previous year inventory, thus making a better market for me to shop and
example of how excess demand reduces the market prices. If I had been given the
opportunity, I would have elected to wait until this excess inventory occurred and
tried to purchase the vehicle from the dealer at a lower cost.
Reference:
Amacher, R., & Pate, J. (2013). Microeconomics principles and policies. San
Diego, CA: Bridgepoint Education, Inc.