Name : Najwa Febriantri (3042211035)

Date/Time : Friday, 8 March 2024

Class : 22BD2
Sub : Business English
Lecturer : Bob Morison Sigalingging, S.S., M.Hum.

Question :
What will happen to the demand If suppliers charge too much for a product? Explain
and provide factual examples!

Answer :
If a supplier charges too much for a product, there tends to be a decrease in
demand. Consumers may be reluctant or unable to pay high prices, so demand for the
product may decrease. This can influence market dynamics and drive changes in
supplier pricing strategies to maintain a balance between supply and demand. In
addition, consumers may look for cheaper product alternatives or look for other
suppliers who offer more affordable prices.
Basically, the relationship between price and demand in economics can be seen
in the law of demand. The law of demand states that the higher the price of a product,
the lower the demand for that product, and conversely, the lower the price of the
product, the higher the demand for that product. This law describes the inverse
relationship between price and demand. The concept of the law of demand is
important in economic analysis, because it can help manufacturers and suppliers
determine the right price for their products.
If the price is set too high, demand will decrease, so that producers and suppliers
will lose potential sales. Conversely, if prices are too low, then even though demand
will increase, producers and suppliers will not earn enough profits to cover production
costs. There are also other factors such as consumer preferences, income, prices of
related goods, and external factors such as changes in government policies or the
global economic situation.