Question

Reflecting on a product or service at walmart discuss the law of supply and demand. How the increase of decrease of the demand affect the supply?

Answer 1

A popular brand of the company is clothing. It includes men’s clothing, women’s clothing, plus-size clothing, children’s clothing, and athletic clothing.

Since the brand name works, the demand becomes slightly inelastic – percentage change in price has little effect on the percentage change in quantity. It happens because consumers of branded products love the brand immensely although there is price change.

Law of supply:

There is a positive correlation between the price of clothing and quantity of clothing (making the other factors like change in production facility, increase in input price, etc. remaining constant) – at an increasing price (which comes out of an increasing demand of product) there is an increasing supply of clothing by the company in the market; and vice versa.

Law of demand:

There is an inverse relationship between the price of clothing and quantity of clothing (making the other factors like income of consumers, change of taste, etc. remaining constant) – at an increasing price there is a decreasing demand of clothing in the market; and vice versa.

Effect on supply:

Supply is affected by demand.

If demand of clothing increases (which happens in festive seasons) there would be an increasing price and it leads to an increase in supply of clothing by fulfilling the law of supply.

If demand of clothing decreases (which happens in lean periods) there would be a decreasing price and it leads to a decrease in supply of clothing by fulfilling the law of supply.