Six Major Variables That Affect Supply Quantity of Goods

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The six major variables that affect supply quantity of goods are (1) price of the good or service, (2) consumer income, (3) price of the related good or service, (4) consumers taste or preference patterns, (5) expected price of the product in future period, (6) number of consumers in the market . Each one of these variable is important as they directly or indirectly impact demand. For the examples discussed below on how demand is impacted, I’ve assumed that all other variables are constant except for the one variable discussed within the example. Generations of GM workers continue to buy GM products because of preference and loyalty. Imagine the impact if all 212,000 GM plus employees working in six continents [http://www.gm.com] decided not to purchase GM cars because they are aware that the workmanship was substandard or the material being used was inferior to what other car manufacturers used. Supply and quantity of goods are impacted when income increases or decreases. For example, if income increased it can either lead to an increase or decrease in the amount of product a consumer purchase. Because the consumer income has increase they may now be buying other products, for example in Canada consumers may be purchasing brand names versus knock-off / no-name products. Image if GM has decided to increase their prices significantly way more that other car manufacturers. I’m inclined to believe that the same 212,000 GM plus employees working in six continents would not purchase the higher price GM cars but would now be looking to buy non-GM manufactured cars. Demand is sometimes based on what the expected price of a certain product will be in a future period. Again if we know that car prices are going to go up in the future then demand would increase in the current period, if it was projected to decrease then consumers would hold off on purchasing

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