INTRODUCTION In Economics, the market relations between prospective sellers and buyers of a good are known as Demand and

Supply. The price and quantity sold in a market is determined by the Demand and Supply model. The phrase “supply and demand” was first used by James Denham-Steuart in his book named Inquiry in to the Political Economy which was published in 1767. Since the 19th century the theory has been unchanged. There is always a change in Demand and Supply of a particular product in a market due to various reasons. There are very few products whose demand or supply doesn’t change with respect to price. These are known as inelastic products. A very good example of perfectly inelastic product is Penicillin. There are elastic products too whose demand changes with respect to price and people don’t hesitate to opt for a cheaper alternative. Tea and coffee are the best example of an elastic product.

This concerned report will explain the factors that will be affecting the Demand and Supply of a given number of products. The report has been prepared through in-depth analysis of the market. The yearly price and sales of various products are examined and collected to obtain this report. After description of the factors affecting Demand and Supply of each product a graph is provided to understand the future market well. Future prediction of each product is given. Different websites and books were of great help which were acquired from our college library and the library of university of east London. The guidance of our lecturer Ms. Ellie Semsar was very supportive in completion of the said topic in a report format with proper referencing followed by a bibliography

I. The law of demand states that quantity demanded moves in the opposite direction of price, and this effect is observed in the downward slope of demand curve. The demand of certain products are analysed below and the factors affecting there demand are listed and elaborated

A. CONVENIENCE FOOD.

The demand for various convenience foods will gradually increase in future. There are various convenience foods available in the market today. Dry pasta is the leading convenience food sold in the US market. In the year 2004 the quantity weight of dry pasta sold was 2446932 pounds at the unit price of $0.36 and the total sales of dry pasta was $1086142. In the following year the unit price remained the same as $0.36 but the quantity of dry pasta sold was 2450666 ponds which produced total sales of $1127520. The demand for dry pasta increased in 2005 and is expected to keep on increasing in the following years. The sales of dry pasta reached $167883 in the year 2006 with a unit price of $0.34 and the quantity of dry pasta sold was 2522206 ponds. The demand of convenience food has kept on increasing due to various aggressive and innovation policies acquired by various companies. There is increase in the brand value and new ways of cooking pasta, such as in fry pans. The intensive advertisement on TV also helped to increase the demand of convenience food. The main reason for the increase of demand of convenience food is that, it takes much less time to cook and its easy to cook. Manufacturers have tried to rid the meals of their unhealthy tag by offering a range of low-fat, low-salt options to tap into the appetite for healthy eating. These various reasons tend to increase the demand of convenience food in the future.

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http://hotdocs.usitc.gov/docs/pubs/701_731/pub3947.pdf

B. PRODUCTS PURCHASED ON THE INTERNET.

The market for internet shopping is huge and will continue to grow rapidly. The demand for internet shopping is high and will continue to increase in the next coming years. The total online market in the year 2004 was estimated to be £6.3 billion. The demand increased in the following year and the total online market was £ 8.2 billion and 10.9 billion in 2005 and 2006 respectively. It is estimated that the demand for the net online market will keep on increasing and will reach the staggering amount of £14 billion and £17 billion in 2007 and 2008 respectively. Various factors are responsible for the increase in demand of online shopping. People find it convenient to shop online since it increases their individual choice and they get more options which help them to find the lowest prices. However there is threat of least awareness of online shoppers, but steps are being taken for more secure environment in the net for the online shoppers. Various selling regulations (‘DSRs’) are being imposed which gives a customer a right to know who they are dealing with and the key information of what they are buying. The regulations also include an unconditional right to cancel within seven days with a full refund and protection against online payment card fraud. These all have created a better and secured environment on the internet which is resulting in the rapid increase of demand of online shopping.

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http://www.oft.gov.uk/shared_oft/reports/consumer_protection/oft921.pdf

C. FAX MACHINES.

The demand of fax machine is decreasing after the evolution of paperless e-mail. The demand for stand –alone fax machine significantly decreased over the last several years. In the year 2002 Uni-Copy Technologies was able to sell 60 fax machines per year. The demand has significantly decreased. This year the in 2007, till October only 7 stand-alone fax machines are sold by Uni-Copy Technologies. Our culture’s demand has changed to more electronic and paperless formats rather than hard copy which enables greater control, more security and manageability of the documents are increased. The shift towards malfunction units of companies of companies and the fall of fax machine production has declined the demand of fax machines. Legal offices are also going paperless due to various advantages of paperless documentation. Fax is costlier than email since it doesn’t have the additional cost of papers and less number of staff are required to attend and reply to e-mails. Fax machine is still used in various parts since 25 per cent of the world have no access to the internet yet but have the access to the fax machine. The demand of fax machine is decreasing and will continue to decrease in the near future.

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http://www.china3cgroup.com/C3C/market.html

D. FILM AND CAMERA.

The market foe digital camera is entering in to a maturity phrase, therefore the demand for digital cameras will decrease slowly in the coming years. The shrinkage of the digital camera market will start in the year 2011. There was a rise of 15 per cent in global shipments of digital cameras in 2006. There is a strong demand for the advanced models in emerging markets but the demand is expected to decrease 8 percent according to Economists. IDC have estimated a negative growth of digital cameras in 2011 after a complete saturation of all regions and markets. The DSLR market is controlled by Japan’s canon and Nikon with over 80 percent of World’s DSLR market. Sony is a major and leading player of digital market as well. The demand of the Worlds digital market will decrease due to the saturation of market in all regions.

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http://www.theage.com.au/news/articles/digital-camera-demand-set-todrop/2007/04/25/118685752797.html

E. VIDEO RENTED FROM RETAIL OUTLETS.

The demand of rented video from retail outlets is slowly decreasing. An intense study on the market of Europe’s rented video reveal that, the average rental price of a DVD in the year 2004 was € 3.26 and the total spending on DVD rental was € 2.1866 million. In the subsequent year the average rental price of a DVD decreased from € 3.26 to € 3.21 while

the total spending on DVD rental increased to € 2.3353 million. In the year 2006 the average DVD rental price increased € 0.01 to € 3.22 and the total spending on DVD rental decreased to € 2.1504 million. The demand of rented video from retail outlets is decreasing slowly and will continue to decrease in future. There are various factors affecting the decrease in demand of rented videos. The main drawback of rental videos from retail outlet is the invention of online multimedia. Internet really does offer an unlimited choice. If there is something anyone wants to watch with a decent broadband connection and some patience with a bit of technical knowledge it can be found on the internet. Another main aspect of the decline in demand is the availability of free pirated and latest videos and movies on the internet. However original videos are also available with a decent cost. These factors are responsible for the decline in demand of rented video from the outlets and will continue to decrease the demand in the future.

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http://www.ivf-video.org/site/share/dlm/Files/European_Keydata_2007.pdf

F. PAY PER VIEW TV PROGRAMMING.

There are three services that provide pay per view satellite broadcasting in Japan. WOWOW is one of the leading providers of pay per view TV programming which uses a broadcasting satellite. The future of the pay per view broadcasting services is not so good and is a bit harsh. In case of WOWOW the growth of satellite broadcasting service has

slowed down. The numbers of registered subscribers are decreasing in the past years. In the year 2004 there were 1.86 million customers registered. The figure came down in the following years. In 2005 the figure was 1.66 million and in 2006 the number of registered customers kept decreasing to 1.46 million. The demand of pay per view customers is expected to decrease in the next coming years to 1.26 million and 1.07 million in 2007 and 2008 respectively. The decreases of customers are due to various reasons. Major TV operators are making focused effort on providing consumers digital multi-channel services incorporating terrestrial digital broadcasting which is a new and appealing feature. They are also providing triple play service which includes telephone, broadband and broadcasting. The pay per view satellite broadcasters are unable to math the value added services given by the major TV operators. The demand for the pay per view TV programming is gradually decreasing.

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http://www.nri.co.jp/english/opinion/papers/2006/pdf/np2006103.pdf

II. According to law of supply, the higher the price, the larger the quantity supplied keeping all other things constant. The law of supply is demonstrated by the upward slope of the supply curve. Factors affecting the supply of a certain goods are listed and elaborated below.

G. CRUDE OIL.

Crude oil demand is increasing and will keep on increasing in the following years. The total Global sale of crude oil in the financial year 2002/2003 was 475 million liters at a price of $ 48 per barrel. In the following years the demand kept on increasing despite the rise of price. In the financial year 2003/2004, a 541million liter of crude oil was sold at a price of $ 48 per barrel and in 2004/2005 the sales increased to 579 liters at a price of $ 70 per barrel. The demand kept on increasing in the following year, however there is a limited supply of oil. In 2005/2006, 743 million liters of crude oil was sold at a price of $ 88 per barrel.Global crude oil demand is expected to grow by about 1.3 million barrels per day in 2008. Mostly high oil prices are a result of geopolitical factors and refining problems rather than market fundamentals. Supply of oil is sufficient in recent times and there is no need to increase the oil production. However the supply of crude oil will gradually slow down in a long run since the resources are limited. In a short run the supply is sufficient and there is no need to increase the production. Reflecting increasing consumer demand for petroleum products, world crude oil demand has been growing at an annualized compound rate slightly in excess of 2 percent in recent years. Another main aspect of rise in demand is the non availability of cheap alternatives.

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http://www.pir.sa.gov.au/__data/assets/pdf_file/0016/27205/oil_sales.pdf http://www.eia.doe.gov/pub/oil_gas/petroleum/feature_articles/2004/worldoilsupp ly/oilsupply04.html

H. COMPUTER MEMORY CHIPS.

Samsung is ranked first Worldwide as the leading supplier of DRAM in two consecutive years of 2004 and 2005. DRAM is the most favorably used memory chip in both Laptops and Desktops. In the year 2004 total revenue of the company worldwide was $ 8,119 million and the following year’s revenue was $ 8,020 million. The growth of the company’s DRAM market rate was -1.2%. In the DRAM segment the shrinkage of revenue was observed. However according to the Semiconductor Industry Association, growth of the DRAM segment was expected in the following year by 9.1 %. The revenue of DRAM is indirectly increased by the transition of DDR2. According to the forecast the sales of DRAM is expected to be grow by 33 % in 2008. The supply of memory chips will rise to meet the rise in demand in the following years. The main reason for the rise of this market is the affordability of Computers and Laptops which has an annual growth rate of 10 %. There is much more popularity of portable PC which has taken a toll on desktops. Computers are the core of every business, which increases the overall demand of the sales of computers and circuitously increases sales and supply of computer memory chips. Wider acceptance of internet has also accelerated the sales of computers. The supply of computer memory chips will indeed rise in the future.

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http://www.samsung.com/us/business/semiconductor/news/downloads/MemoryBr ochure0706.pdf

I. HOTEL ROOMS.

The demand and supply of hotel rooms in UK and London are studied, which concludes that 2000 extra rooms will be required per annum over a period of 2007 to 2016. The key reason of this huge demand of hotel rooms is the rise of international visitors. London is the most visited city by international tourist with a percentage of 1.75% of the world’s international arrivals visiting London. London’s profile has been developed and raised in recent years with better marketing and promotion of London. The successful bid for the 2012 Olympic and Paralympics Games also adds to the popularity. Economist’s analyzed that, 90 million international visitors spent one night in 2004, and the number of visitors increased to 155 million in 2026 which is a 72% growth. The number of hotel rooms available in 2004 is 98421 and in 2005 is 100122, the number rooms available in 2006 is 101232. This year the total number of rooms is expected to increase to 103875 and in 2008 the number of room available is expected to be 105876. The supply of hotel rooms in less and is increasing slowly.

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http://www.london.gov.uk/mayor/planning/docs/hotel-demand-study.pdf

J. FAST FOOD OUTLETS IN EMERGING MARKETS.

Saizeria co., Ltd. In located in Saitama, Japan is a chain of fast food restaurants. The annual report of the company is examined and the demand and supply is analyzed. In the year 2004, the number of restaurants were 666 and the total number of customers arrived

was 106525. The following year supply increased with the increase in demand. In 2005 the total number of customers was 106856 with an increase in the number of outlets to 713 and the increase continued to 730 outlets in 2006 with a total number of customers to 111561. The supply and demand are expected to increase in the following years due to various reasons. The use of fresh vegetables and Italian food which is loved worldwide increase the demand. Well balanced, serve well healthy meals at affordable price increases the number of customers which they can enjoy every day and the increase in number of stores regularly also attracts the customers. The supply will keep on rising in the future with the rise in demand.

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http://www.saizeriya.co.jp/ir_info/en/pdf_en/annual_report/annual_report2006.pd f

K. CREDIT CARDS ISSUED BY FINANCIAL INSTITUTIONS.

The market of credit cards is growing. The growth of credit cards is 30 - 40 % in India. Credit cards issued by ICICI bank was examined and found that, the total number of cards issued was 13.1 million, 17.5 million in the financial year 2005 and 2006 respectively. The number of cards to be issued this year in 2007 is expected to be 22.6 million. There is a constant growth of demand and supply of credit cards in India. Nowadays there is wider acceptance of cards by merchants and with more banks and foreign, public sector units coming in this market is more aggressive than ever. Main reason of rise in demand and supply are the innovative schemes and irresistible offers to the cardholders and various partner merchants with co-branded cards with added benefits

on specific usage. However only 2% Indians carry cards till now, so the figures will rise in the future. Nowadays more customers prefer to make payments through credit cards rather than cash, moreover its easy to carry and safe to travel which makes it popular and the acceptance level is high. The interest level is also very nominal for the facilities and convenience provided by the credit cards. These factors will result in the rise of supply of credit cards in future.

12. http://www.thehindubusinessline.com/2007/07/19/stories/2007071951010600.htm

L. LAPTOP COMPUTERS.

The affordability of laptops have made it popular day by day and it’s the main reason for the rise in demand of laptops. To meet the high demands the supply has also increased. The annual sales of laptops in India are taken in to consideration in this case and conclusion is acquired. Laptop sales recorded a high growth of 97 %, with a rise of 41 % in the business segment. Affordability increased the sales in households. In the financial year 2004-05 total number of laptop sold was 177105 which increased in 2005-06 to 431834. This year in 2007 it is expected to reach a highest number of sales of 850860. On an average the cost of an entry level Laptop now ranges between RS 31000 to RS 40000 compared to last year’s range between RS 58000 to 80000. Some laptops now also cost around RS 10000 which is driving buyers to opt for Laptops. Government policies also helps in increase of sales, for instance government now allows duty free import of Laptops as baggage. Laptops have also amalgamated next generation technologies like

Wi-Fi, Bluetooth, and Infrared with mobile computing which brings added utility to Laptops and attracts the youth as well. The demand of Laptops will increase in the future due to the factors discussed above and the supply will also increase to meet the demand. (2987 Words)

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www.physorg.com/pdf10165.pdf http://www.mait.com/newsletters/news197-eNL%20on%20Annual%20Review%202006-07.pdf?id=197

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