Chapter 4

Chapter 4 is titles “the market forces if supply and demand” and is introduces a market as being a group of buyers and sellers of a good or service, and that buyers demand and sellers supply. This lead to the description of the demand and supply curves and the different factors and elements that relate and influence these curves, causing shifts as well as movements along the curves. These curves have an equilibrium point between them which shows when the quantity supplied equals the quantity demanded. This chapter introduced topics such as normal and inferior goods, substitutes, compliments, supply and demand.

In major cities the popularity and uber and lyft have definitely influenced taxi companies by lowering the quantity demanded, and therefore shifting the demand curve to the left. Because the supply is the same this causes the equilibrium of taxis to decrease in both price and quantity. There is another option instead of taxis, however that does not mean there are less taxis and this negatively affects the economy of taxis.

In the town I am from there is a lot of change in the restaurant industry, especially because it is a tourist town and results in off seasons which a lot of companies can’t survive. For this reason most restaurants have a specific niche to be successful. We had a new seafood restaurant, and being that we are in the mountains this was very rare and resulted in an entirely new demand for seafood that wasn’t there before because nobody was properly supplying it. Because they were basically the first and only seafood restaurant in town they could set their own prices since they had all of the quantity, making it very expensive.

A new and growingly popular phenomenon are food delivery services which have relationships with different restaurants, allowing you to order from almost anywhere and have it delivered to where you are. Especially in college this has made things increasingly simple and I know few people who don’t regularly use these apps. This has increased the supply of restaurants that deliver food and therefore have influenced peoples demand of eating in. It has also changed the demand that people have at grocery stores since they are not cooking as much and the demand for in venue dining at restaurants.

Overall, I find this chapter very important as the supply and demand of something is relevant in all of our daily lives and is at the center of what economics is.