DEMAND, SUPPLY, AND PRICE EQUILIBRIUM. Business & Marketing Term Paper

DEMAND, SUPPLY, AND PRICE EQUILIBRIUM
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Introduction
The daily life product that I have taken for this report is Colgate Tooth Paste. I have been a loyal user of this product for some years. The details of the market for this product will be discussed in the questions below.
1. What factors influence the demand for this product? What factors influence the supply of this product?
The main factor that influences the demand for this product is that it is an essential item for hygiene. Hence, generally, Colgate Tooth Paste follows stable and unchanging demand in a typical year. More so, this product has not modified itself tremendously in the last ten years, hoping that the loyal customer base will continue to use the product due to its simple features.
Secondly, the demand for this product is influenced by the promotional campaigns of this company as well as those of its competitors. For example, with more intensive advertising by the competing toothpaste brands, it is expected that some (not so loyal) consumers will shift to another company to try their toothpaste for hygiene purposes.
As for the supply, the availability of raw material and transportation networks are important components that are influencers in this case of Colgate toothpaste. The transportation and distribution are essential for the supply of this product as it is a consumer daily use product, requiring extensive supply and distribution at a large number of retail outlets (Franco, 2007). The prices of raw material influence the supply of this product. For example, with a rise in chloride prices, the company may wait a while before fully supplying the product in bulk, so that the raw material price may come down in the future.
2. How have these changes in supply and demand affected the equilibrium price of this product?
The equilibrium price of Colgate toothpaste is certainly determined by the interaction and interplay of supply and demand, those factors were discussed in the previous question. As discussed above, the demand for Colgate toothpaste, as an essential daily use product for hygiene has stayed rather constant and stable. On the other hand, the supply can be affected negatively due to raw material prices and non-availability of extensive distribution networks.
This implies a change in the equilibrium price of Colgate toothpaste. Specifically, with a negative influence on...