Topic 2 - Identifying a business opportunity

Business studies Unit 1

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Supply and Demand

  • Factors of demand:
    • income
    • Govenment legistlations
    • Advertising and Marketing 
    • Weather, seasons and occasions (e.g. Christmas) 
    • Fashion Change
    • Competition
  • Factors of Supply:
    • Weather
    • Cost of raw materials
    • Labour cost
    • Civil wars, strikes, natural disasters and political / economical polices 
    • Govenment legistlation 
    • Natural resources 
    • Tax
  • Demand depends on disposable income and willingness to buy
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Demand Graphs

(http://www.econport.org/content/handbook/Demand/Graph/mainColumnParagraphs/0/content_files/file3/demand_graph2.gif)

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Supply Graphs

(http://www.econport.org/content/handbook/supply/graph/mainColumnParagraphs/0/content_files/file0/handbook_supply_graph2.gif)

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Supply and Demand Graphs

(http://www.econport.org/content/handbook/Equilibrium/graph/mainColumnParagraphs/0/content_files/file/equilibrium_using_a_graph.gif)

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Supply and Demand

  • The demand graph shows that as demand goes up, the cost goes down
  • The supply graph shows the if supply is more its value will be less and that is supply is less its value will be more
  • The supply and demand graph shows that an equilibrium can be achieved by having the right demand to the right supply
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