Supply and Demand Factors

Law of Diminishing Marginal Unity

as people acquire the same product reaches a certain point, the satisfaction of buying the same product will eventually lead to zero

The Income Effect

our money is finite, requiring non purchase of otherwise desired items

The Substitution Effect

an introduction of a cheaper variant of a product to the customer would either increase the demand or mitigate the income effect

Profit Factor

a business’s goal of acquiring profits leads to the decision to produce

Artificial Scarcity

when a producer intentionally limit the supply of a product/service in order to increase demand

Market Entries and Exits

as the price of goods/services increase, it attract more providers seeking profit, which increase supply as a result

Quality Factor

if quality of goods/supplies increase, so does demand

Consumer Preference

the change in individual or group’s idea of what is desirable

Technological Innovation

advancements in production and transportation technology can increase supply and/or cause price to drop

Government Manipulation

the use of government action can either encourage or discourage the use of goods/services

Natural Condition

when climate and weather contributes to the ability to product, transport, store goods, or services