Price and Demand Relationship Assignment Help
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Now, consider the price, and the quantity that you are willing to purchase at that price and answer the following questions.
1. How does price influence the quantity of an item you are willing or able to purchase?
The price plays an essential role when I go out to buy my products. Since I am a student who is only working part-time, it is essential for me to budget and ration my money in advance to all the necessary things I need. If the price suddenly decreases, there are chances I might buy my eggs and bread a little more than regular since I can always use them. So for a week, if I'm buying 7 eggs, on a decreased price I can buy around 10 of them. Furthermore, if the price suddenly increases, I'll try to maintain my regular quantity of items. But if it becomes too steep, I'd decrease the quantity and look for alternatives. As far as quantity is concerned, I prefer breaking them into weeks' worth of stuff and if the price is increasing then I also go by meals per day.
With vegetables, the situation is different since I prefer to have them fresh and there are always cheap alternatives available somewhere or the other. It is not that difficult to find and hence will not be that much of a problem.
2. Does it make a difference if the item is an essential item, like food vs. a luxury item like a sports car whether you are likely to continue to purchase the item even if the price goes up?
Yes, if the item is an essential and the prices go up I will still continue buying them. At the end of the day, it is about my survival. There shall be no compromises made on the needs. I will always try to either work hard and increase my income or I will look for feasible alternatives so that I am able to compensate for the increase in the prices. Food is essential and I make sure never to compromise my budget for it.
If it is a luxury item such as makeup or eating out or a sports car, I will definitely cut back on them. If I'm aware of my limited income and how I have to ensure that I have to sustain myself on this only, it is ideal to not spend the money elsewhere. There are alternatives to everything available and hence, I will try to find cheaper and more affordable alternatives to these items as well.
3. Consider what you can infer from your own purchasing habits about price and demand? Explain your answer.
My purchasing habits are relatively simpler than the rest. I have observed that I do not go about spending for no reasons, however, I do focus on the quality of the things that I purchase. I expect the vendor to give me the quality of what price I pay. If for a t-shirt I am paying $5 I expect it to run for at least a year (considering I am good at maintaining things). If not, then I will get to know that I have to either work better on keeping things or find better quality.
As far as price and demand are concerned I have observed the regular relationship between them a lot in my immediate economic ecosystem. For example, if the market is running short on certain vegetables such as peas, then it's pretty evident that the vendors who have them will immediately surge to price to double of what it is in full supply. Seeing that the demand is high and the supply is short, it is but obvious that they will aim to make profits from the hiked up price. I have also observed that I sometimes give in to the increased prices if I "Want" something. Even if the need is not there and I simply like it, I tend to lose control. This is not very good of me and I feel this to be the only issue in my purchasing pattern and behaviour that I have observed so far.
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