The Effect of Income on Demand and Supply
Order ID |
53563633773 |
Type |
Essay |
Writer Level |
Masters |
Style |
APA |
Sources/References |
4 |
Perfect Number of Pages to Order |
5-10 Pages |
Description/Paper Instructions
The Effect of Income on Demand and Supply
Introduction:
Income is a significant factor in determining the demand and supply of goods and services in the market. It is a key determinant of consumer behavior and influences their purchasing power, preferences, and buying decisions. In this essay, we will discuss the impact of income on demand and supply in detail.
Effect of Income on Demand:
Demand refers to the willingness and ability of consumers to purchase a particular good or service. Income is one of the major factors affecting the demand for goods and services. As income increases, consumers’ purchasing power increases, and they are able to buy more goods and services, leading to an increase in demand.
For instance, consider the case of luxury goods such as expensive cars, high-end fashion items, and jewelry. These products are typically purchased by people with high income levels, and as their income increases, they are more likely to buy more of these goods, leading to an increase in demand. On the other hand, low-income consumers are more likely to purchase essential goods such as food and basic clothing, and their demand for these items is less affected by changes in income.
Furthermore, the income elasticity of demand is a measure of how responsive the quantity demanded of a good is to changes in income. If the income elasticity of demand is greater than one, the good is considered a luxury good, and if it is less than one, the good is considered a necessity. For example, if a person’s income increases by 10%, and their demand for a luxury item such as a sports car increases by 20%, the income elasticity of demand for the sports car is greater than one.
Effect of Income on Supply:
Supply refers to the amount of a particular good or service that producers are willing and able to produce and sell at a given price level. Income can affect the supply of goods and services in various ways.
Firstly, changes in income can lead to changes in the production costs of goods and services. For example, if the cost of labor increases due to a rise in wages, the cost of production will increase, leading to a decrease in the supply of goods and services. Similarly, if the cost of raw materials increases, the production cost will also increase, leading to a decrease in supply.
Secondly, changes in income can also affect the investment decisions of producers. If consumers have higher disposable incomes, they are more likely to spend on luxury items, leading to an increase in demand for these goods. This, in turn, can lead to an increase in the supply of luxury goods, as producers increase their investment to capitalize on the increased demand.
Thirdly, changes in income can also affect the technological advancements in production processes. If there is an increase in income, producers may have more resources to invest in research and development, leading to the development of more efficient and cost-effective production processes. This, in turn, can lead to an increase in the supply of goods and services.
Conclusion:
In conclusion, income is a significant factor affecting both demand and supply in the market. Changes in income can lead to changes in consumer behavior, preferences, and purchasing power, leading to an increase or decrease in the demand for goods and services. Similarly, changes in income can also affect the production costs, investment decisions, and technological advancements of producers, leading to an increase or decrease in the supply of goods and services. Understanding the impact of income on demand and supply is essential for businesses and policymakers in making informed decisions regarding production, pricing, and allocation of resources.
The Effect of Income on Demand and Supply
RUBRIC
QUALITY OF RESPONSE |
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POOR / UNSATISFACTORY |
SATISFACTORY |
GOOD |
EXCELLENT |
Content (worth a maximum of 50% of the total points) |
Zero points: Student failed to submit the final paper. |
20 points out of 50: The essay illustrates poor understanding of the relevant material by failing to address or incorrectly addressing the relevant content; failing to identify or inaccurately explaining/defining key concepts/ideas; ignoring or incorrectly explaining key points/claims and the reasoning behind them; and/or incorrectly or inappropriately using terminology; and elements of the response are lacking. |
30 points out of 50: The essay illustrates a rudimentary understanding of the relevant material by mentioning but not full explaining the relevant content; identifying some of the key concepts/ideas though failing to fully or accurately explain many of them; using terminology, though sometimes inaccurately or inappropriately; and/or incorporating some key claims/points but failing to explain the reasoning behind them or doing so inaccurately. Elements of the required response may also be lacking. |
40 points out of 50: The essay illustrates solid understanding of the relevant material by correctly addressing most of the relevant content; identifying and explaining most of the key concepts/ideas; using correct terminology; explaining the reasoning behind most of the key points/claims; and/or where necessary or useful, substantiating some points with accurate examples. The answer is complete. |
50 points: The essay illustrates exemplary understanding of the relevant material by thoroughly and correctly addressing the relevant content; identifying and explaining all of the key concepts/ideas; using correct terminology explaining the reasoning behind key points/claims and substantiating, as necessary/useful, points with several accurate and illuminating examples. No aspects of the required answer are missing. |
Use of Sources (worth a maximum of 20% of the total points). |
Zero points: Student failed to include citations and/or references. Or the student failed to submit a final paper. |
5 out 20 points: Sources are seldom cited to support statements and/or format of citations are not recognizable as APA 6th Edition format. There are major errors in the formation of the references and citations. And/or there is a major reliance on highly questionable. The Student fails to provide an adequate synthesis of research collected for the paper. |
10 out 20 points: References to scholarly sources are occasionally given; many statements seem unsubstantiated. Frequent errors in APA 6th Edition format, leaving the reader confused about the source of the information. There are significant errors of the formation in the references and citations. And/or there is a significant use of highly questionable sources. |
15 out 20 points: Credible Scholarly sources are used effectively support claims and are, for the most part, clear and fairly represented. APA 6th Edition is used with only a few minor errors. There are minor errors in reference and/or citations. And/or there is some use of questionable sources. |
20 points: Credible scholarly sources are used to give compelling evidence to support claims and are clearly and fairly represented. APA 6th Edition format is used accurately and consistently. The student uses above the maximum required references in the development of the assignment. |
Grammar (worth maximum of 20% of total points) |
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10 points out 20: The paper is often unclear and difficult to follow due to some inappropriate terminology and/or vague language; ideas may be fragmented, wandering and/or repetitive; poor organization; and/or some grammatical, spelling, punctuation errors |
15 points out of 20: The paper is mostly clear as a result of appropriate use of terminology and minimal vagueness; no tangents and no repetition; fairly good organization; almost perfect grammar, spelling, punctuation, and word usage. |
20 points: The paper is clear, concise, and a pleasure to read as a result of appropriate and precise use of terminology; total coherence of thoughts and presentation and logical organization; and the essay is error free. |
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3 points out of 10: Student needs to develop better formatting skills. The paper omits significant structural elements required for and APA 6th edition paper. Formatting of the paper has major flaws. The paper does not conform to APA 6th edition requirements whatsoever. |
5 points out of 10: Appearance of final paper demonstrates the student’s limited ability to format the paper. There are significant errors in formatting and/or the total omission of major components of an APA 6th edition paper. They can include the omission of the cover page, abstract, and page numbers. Additionally the page has major formatting issues with spacing or paragraph formation. Font size might not conform to size requirements. The student also significantly writes too large or too short of and paper |
7 points out of 10: Research paper presents an above-average use of formatting skills. The paper has slight errors within the paper. This can include small errors or omissions with the cover page, abstract, page number, and headers. There could be also slight formatting issues with the document spacing or the font Additionally the paper might slightly exceed or undershoot the specific number of required written pages for the assignment. |
10 points: Student provides a high-caliber, formatted paper. This includes an APA 6th edition cover page, abstract, page number, headers and is double spaced in 12’ Times Roman Font. Additionally, the paper conforms to the specific number of required written pages and neither goes over or under the specified length of the paper. |
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