Essay on Supply and Demand

732 Words Mar 2nd, 2013 3 Pages
Supply and Demand
Carlee Spencer
XECO/212
December 9, 2012
Jonathan Keisler

Supply and Demand
Cars are a good that almost everyone has. I just purchased my new car, an Audi A4. When it comes to any car manufacturing company they try to gauge what the market will do within the year and make enough vehicles to supply to their customers. Many of the manufacturing companies have started making their new models and sending them out to dealerships to be displayed and many models there for purchase. Then there are some companies that will only make enough models to have a few for purchase and the rest can be custom ordered by each customer to their liking which is something consumers see as a benefit and can raise the demand of certain
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Supply is directly related to the projected demand and of course the supplies available for building the car.
Substitutes for a car definitely depend on your location. In New York taxis, the subway system, buses, biking, or even walking would be substitutes. In Montana where I am located, in practically the middle of nowhere, and have to drive a half hour in to work each day, I have to have a vehicle or find someone who does that I can catch a ride with all the time. It is not practical to not have a vehicle in areas like this where things are so spread out so there are not any substitutes. When it comes to talking about the vehicles themselves, for my Audi A4 there would be many substitutes, all consisting of the other makes and models that cost less than the Audi. Some of the direct substitutes in the luxury class would be the Mercedes C class, BMW 3 series, and Volvo S series, each depending on the price relative to the Audi.
Compliments of a car would be parts. If parts for that car rise then the demand for owning that car will decrease. In the chance that you get in a wreck most people do not want to pay higher prices than they have to for the parts. A second compliment would be gas, oil, and other fluids for the car. As the price of these increase for a certain vehicle the demand for that vehicle will decrease.
Since cars are sort of a necessity in today’s

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