What are the determinants of market period demand and...

Key Concepts

Market Period

The market period is an extremely short time frame in which firms cannot change their production levels or inventory because inputs are fixed. This concept emphasizes that neither producers nor consumers have enough time to adjust to price changes by altering production or consumption patterns.

Market Period Demand Determinants

In the market period, demand is largely determined by consumers' immediate willingness and ability to purchase a limited and fixed quantity of goods. Factors such as consumer preferences, urgent needs, available income, and the current price level play a key role, although with the constraint of time only price changes are able to significantly influence quantity demanded.

Market Period Supply Determinants

During the market period, the supply available is fixed by the quantities already produced or held in inventory since there is no opportunity to increase output in the short term. The main determinant is the pre-existing stock and short-run production limitations, which make the supply highly inelastic in this brief period.

Transcript

00:01 And there are, i believe, five factors that can cause a shift in demand curve in the markets for goods and services.

00:11 And i will go through it one by one for you guys.

00:16 First is income.

00:21 So when the income of consumers increases, so when the income goes up, so people can earn more money, demand of goods and the service can also increases.

00:35 So the demand goes up as well, and which means demand curve shifts rightward.

00:49 On the other hand, when the income of a consumer decreases, demands of goods and services also decreases, and the demand curve shifts leftward.

01:03 So it goes up, right word goes down left towards.

01:07 It's fair.

01:07 It's real forward, right? second thing is changing tastes and preferences.

01:21 Changing changes in taste and the preferences change the quantity mounted of good at every present, therefore shifts the demand curve.

01:30 For example, because of the impact of western culture on india, people's preferences are changing more towards western climate.

01:39 So it will shift the demand curve, but it will go right or leftward.

01:54 It really depends on the reality, right? people are more likely to buy this good or less likely.

02:04 It just depends on the consumer either love this product or dislike this product.

02:11 And third factor is changes in size of population.

02:22 This is very easy to understand because in a society with relatively more female population where i have more demand for goods like cosmetistics.

02:36 Like people like the more female means maybe the product, the demand of lipsticks or the demand of ash shadows will go up.

02:48 So the demand curve of this goods will shift left towards.

02:53 Or for some societies have more population like china or india, so the demand of something like education or demand of healthy services, healthcare will go up...

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