Real-World Examples of Demand and Supply in Marketing

📚 Quick Study Guide

• 📈 Demand: The quantity of a product or service that consumers are willing and able to purchase at a given price.
• 📉 Supply: The quantity of a product or service that producers are willing and able to offer at a given price.
• ⚖️ Equilibrium: The point where demand and supply intersect, determining the market price and quantity.
• Elasticity: Elasticity measures the responsiveness of demand or supply to changes in price or other factors.
  • 💸 Price Elasticity of Demand (PED): Measures how much the quantity demanded of a good changes in response to a change in its price. $PED = \frac{\% \; Change \; in \; Quantity \; Demanded}{\% \; Change \; in \; Price}$
  • ⚙️ Price Elasticity of Supply (PES): Measures how much the quantity supplied of a good changes in response to a change in its price. $PES = \frac{\% \; Change \; in \; Quantity \; Supplied}{\% \; Change \; in \; Price}$
• 📢 Marketing Impact: Marketing efforts can shift demand curves, influencing sales and market share.
• 🌍 External Factors: Economic conditions, consumer preferences, and competitor actions affect demand and supply.

🧪 Practice Quiz

1. Which of the following is an example of increased demand due to effective marketing?
   1. A) A decrease in the price of gasoline.
   2. B) A popular influencer promoting a new brand of headphones.
   3. C) A factory increasing its production capacity.
   4. D) A government subsidy on agricultural products.
2. What happens to the equilibrium price when demand increases and supply remains constant?
   1. A) It decreases.
   2. B) It increases.
   3. C) It remains the same.
   4. D) It fluctuates randomly.
3. A coffee shop notices that when they lower the price of their lattes, they sell significantly more. This is an example of:
   1. A) Inelastic demand.
   2. B) Elastic demand.
   3. C) Perfectly inelastic demand.
   4. D) Unitary elastic demand.
4. A sudden frost destroys a large portion of the orange crop. What is the likely effect on the supply and price of orange juice?
   1. A) Supply increases, price decreases.
   2. B) Supply decreases, price increases.
   3. C) Supply increases, price increases.
   4. D) Supply decreases, price decreases.
5. A company launches a new smartphone with innovative features. Initially, they produce a limited quantity. This strategy reflects:
   1. A) Excess supply.
   2. B) Creating artificial scarcity to drive up demand.
   3. C) Meeting existing demand perfectly.
   4. D) Ignoring market demand.
6. Which factor would NOT typically shift the demand curve for a product?
   1. A) Changes in consumer income.
   2. B) Changes in the price of related goods.
   3. C) Changes in the cost of production.
   4. D) Changes in consumer tastes and preferences.
7. A car manufacturer offers a significant discount on last year's models to clear inventory before the new models arrive. This is an example of:
   1. A) Increasing demand at the original price.
   2. B) Adjusting price to reduce excess supply.
   3. C) Ignoring the principles of supply and demand.
   4. D) Creating a perfectly inelastic supply curve.