Question

law of supply and demand- A recent example of this is the oversupply of oil at the same time worldwide demand has decreased. Hurray for lower gas prices!!! Are there other consumer products you can think of that will be impacted by supply or demand in the next couple of years? Are these changes likely to affect job growth, positively or negatively? What about the value of a company stock? Please need a mini essay thanks

Answer 1

The law of supply and demand can be used in making predictions about the price and quantity of a particular product in the near future. Take for example the supply and demand of solar panels.

The demand for solar panels is likely to increase in near future because of various factors. Many developing countries now promote the use of solar panels in various energy projects. Developed countries have already been using solar panels and the same pattern is likely to be followed. With increase in the price of gasoline and reduction in the reserves of coal, the reliance towards solar energy for the production of electricity has received a great boost from governments of many nations.

On the other hand or relative reduction in the cost of manufacturing of solar panel is expected to increase the supply of solar panel in the world as a whole. We therefore foresee that the demand curve for as well as the supply curve of solar panel is likely to shift outwards. The price is going to be increased as a result of demand shift and is going to be reduced as a result of supply shift. The overall effect will depend upon the size of shift. The quantity of solar panels demanded and supplied will logically be increased.

We can expect a positive change in the job growth when more energy projects are being initiated by the government. Nations that are located within the Tropics are more likely to receive direct sunlight and therefore would install more solar panels and experience a great job growth. This can also appreciate the value of the stock of companies that are related to manufacturing and installation of solar panels.