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Factors Affecting Demand and Supply of Chocolate. ECO101 (Essay Sample)

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ECO101_Economics_in_a_Business_Environment.doc ECO101 Economics in a Business Environment - Essay Due Date: End of Week 10 Assessment Weighting: 40% Length: 1500 words Attempt the following essay to ‘linking theory to practice'. 1. Select a product/service (for example PS3/Wii/Chocolate/Holidays abroad/Events management/Hospitality etc.) and research the factors that affect its demand and supply. Also establish if the demand of your chosen product/service is Price elastic or inelastic. Guidance for writing essays General Points 1. Identify the instruction words: e.g. Why/ Research/Explain 2. Identify key words in the question e.g law of demand and Supply, elasticity 3. Identify any terms which need to be defined e.g. opportunity cost. 4. Remember DEEDA alternatively DADA. This is a way to check you have covered all the main requirements of the question. Define – have you defined all essential terms? Explain – is your explanation clear? Example – is an example asked for in the question or would an example help your explanation? Diagrams – are diagrams asked for in the question? Remember to use diagrams /graphs where possible to help explain your argument. Analyse – is your analysis clear and does it focus on the question OR (Define, Assumptions, Diagrams, Analysis) ARIAL, SIZE 12, 1.5 SPACING APA/ NEEDS TITLE PAGE source..
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Factors Affecting Demand and Supply of Chocolate
Chocolate is food that can be consumed raw or processed. It can be sold as powder to be used as an ingredient for making hot drinks, or produced as a solid bar for direct consumption. Every product in the market is governed by the laws of demand and supply that control the quantity produced, the quantity bought and at what price (EconPort, 2006). This way, the markets have managed to compete fairly and even the producers have known what to produce and how much to sell it. The forces of demand and supply are governed by the determinants of demand and supply respectively. The law of demand states that when the quantity of a product demanded by the consumers increases with decrease in price (BlackAcademy.net, n.d). This also means that when the price of a commodity increases, its demand in the consumer market decreases. Therefore the relationship between the price at the market and the consumer demand is inversely related.
There are several determinants of demand that determine the quantity of chocolate demanded in the market. Demand in itself is the desire to acquire a specific amount of a product when all other factors remaining constant. There are a range of factors that determine the quantity of chocolate demanded by consumers (BlackAcademy.net, n.d). The ability to buy more of chocolate by a consumer totally depends on the purchasing power of chocolate in the market. It is evident that every consumer does a lot of purchases all the time, but the quantity of a particular good, maybe chocolate, will differ according to its price, needs, and other factors.
One of the factors that determine the quantity purchased of chocolate is its price at the market. Price change of chocolate or any other commodity affects so much its quantity demanded by a consumer of even in the market in general. It should be understood that the factors affecting the quantity demanded by consumers are determined also by the consumers themselves. Every time the price of chocolate goes up, the quantity demanded by consumers decreases. On the same note, when prices of chocolate in the market reduce, consumers tend to purchase more. This is due to the feeling of spending little for the chocolate rather than other commodities. This has been seen in every market on different brands of chocolate are being bought the more than normal most especially when its prices are low (BlackAcademy.net, n.d).
The price of other related commodities also affect the quantity demanded of chocolate. For instance chocolate powder for making beverages has substitutes like coffee and tea. Moreover, chocolates bars are bought as gifts for loved ones, they can have several gifts that can act as gifts to loved ones (EconPort, 2006). This in the long run implies that shall the prices of the substitutes of chocolate decrease, then the demand for chocolate will also fall due to t...
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