Supply and Demand and Price Elasticity

Supply and Demand and Price Elasticity Paper
In today’s society, individuals constantly interact among one another that inhibit ones behavior whether it is household related or business endured.   “The behavior of an economy reflects the behavior of the individuals who make up the economy (Mankiw, 2007).   Individuals connected through current trends are influenced in many ways through constant changes in supply and demand as well as the changes in price elasticity.   Determining how changes in price and quantity influences the markets’ equilibrium, the fluctuation of the demand and change in curve, and the substitutions that may affect the demand in price elasticity is discussed.   Despite diversity within the society, one must analyze the causes associated in the supply and demand monopoly chain.   Economists, for example, identify the connections and its characteristics within the marketplace to determine the market price.   To better understand the association between supply and demand and its position within the marketplace, economics examines efficiency and the shifts in the supply and demand curves.   With greater precision, the necessity of goods possesses its own unique connections that affect an individuals’ needed and wants through supply and demand.
Many factors may cause changes in supply and demand such as price of substitute goods, consumer income and prices of compliment items, consumer expectations, government, input technology, and trend.   For example, a high gas prices incentives customers to purchase smaller and more fuel efficient cars such as hybrids.   Cars with high gas consumption such as hummers, large trucks and SUV, and luxury cars with larger engines become less in demand. The demand curve for large vehicles shifts inward.   In contrast, the demand curve for hybrid vehicles and other gas efficient vehicles shifts outward with higher demand.   In response to the customers’ demands, in 2008, General Motors announced a major shift away from...