Non-Price Determinates Of Demand And Supply – Statistics Project Example
The paper "Non-Price Determinates Of Demand And Supply" is an excellent example of a statistic project on macro and microeconomics.
Demand has been defined as “the number of good buyers will actually buy at any one time at each of the possible prices that might be charged” and Supply is “the number of goods a seller will actually sell at any one time at each of the possible prices that might be received” (Lynn, 1965).
Apart form Prices; there are other factors that affect the Demand and Supply. They are called Non-price determinants. The major nonprice determinants of demand are (1) income, (2) tastes and preferences, (3) the price of related goods, (4) changes in expectations of future relative prices, and (5) population (i.e., market size). The major nonprice determinants of supply are (1) input costs, (2) technology, (3) taxes and subsidies, (4) expectations of future relative prices, and (5) the number of firms in the industry. (Economic Concepts)
Let us look at these factors of Demand and Supply with the example of the different rants for houses of 3 bedrooms and 2 bathrooms in various cities in the USA. The following table shows the rent of the same of cities in the USA.
From the table, we see that the prices for the same house vary across different cities. We can clearly understand that Supply and Demand of houses have affected the prices of the same. The rents of houses in cities like Miami and Chicago seems to be considerably higher than the others. The reason could be because the Demand for the houses is more while the Supply is less. Yet, a city such as Pitsburg and Cleveland appears to have lower house rents than others, most probably for, the Supply of houses is more than the Demand.
This would mean that the houses in Miami and Chicago are costlier because of factors such as income of people or the taste of people for higher standards of houses or the population of the place. These are the non-price determinants of demand. And the houses in other places could be lower for; supply of houses is more because of the factors such as less cost of house maintenance and more number of available houses around the city. These are the non-price determinants of Supply.
Therefore, form the above findings, we know that Demand and Supply determine the prices of house in cities across the USA. We also find that the non-price determinants of demand and supply play an important role in the prices of the house across the USA.