SUPPLY AND DEMAND Essay Example | Topics and Well Written Essays - 500 words - 1

SUPPLY AND DEMAND - Essay Example An increase of firms offering the same product lowers demand since the customers can meet their needs by choosing from various companies. However, a decrease in the number of enterprises providing substitute products would result in an increase in demand. The quality of the product is another significant factor that can cause a change in the demand for the Tropical Smoothie Cafà © products. An increase in quality would increase demand, and a decline  in  quality would lead to a decrease in demand (Arnold, 2008).Essentially, customers will always go for quality products. In this regard, the firm must enhance quality production to promote demand. Some of the factors that would affect change in supply include the price of inputs and the level of production technology used (Abdul, 2002). An increase in the  cost  of inputs results in the decline of supply. Essentially, a rise in the cost of inputs means that the firm has to spend more to maintain the same supply as it was before the price change. In this regard, the firm might not be in a position to meet the addition cost and, therefore, end up ordering for less supplies. On the contrary, a decrease in the price of inputs leads to increased supplies. The level of production technology also affects the change in supply. Use of an advanced and efficient technology would lead to increased supply (Boyes & Melvin, 2014).  . Apparently, efficient technology speeds up the production process, and this increases the total output. On the other hand, the use of outdated and inefficient technology results in reduced supply. Essentially, defective technology is likely to cause delays in productions. The delays in productions lead to reduced output and, therefore, reduced supply. The quantity demanded can be changed by manipulating the price of the product. For instance, all other factors held constant, a decline in rice leads to an increase in