Factors_of_Supply_and_Demand

A good that I have experience purchasing is a new car. A car is a necessity if you live in the suburbs. Buses are crowded and nasty and I prefer not to ride in them. I love the convenience of having my own car and being able to go everywhere I want to on my own time. A car is much better than a bus, or taxi. You pay to ride them and in the end you never own anything. Your money is just building up in someone else’s pocket and you have nothing to show for it. Buying a car is also a much better option than renting one. You’re going to make a higher payment renting a car, than you would purchasing one and making a car payment. Even though you may have some interest, you need to shop around for the best deal and your money will stack up and eventually your car will be paid off. Whereas a renter, pays and pays and the money has not built up and you’re not purchasing anything. In simpler terms buying is better than renting. You spend the same amount and will own nothing, unless you buy. A car is in demand especially for people living in the suburbs. Interstates and highways make it very easy to get back and forth from the city. Therefore people can live in the low cost suburbs, and still work in a big city. The only necessity is having a vehicle. With the economy doing so bad right now, a lot of people are not purchasing new cars, but when they do a huge factor is gas mileage. Everyone wants to get better gas mileage because the gas prices are so high. Since cars with good gas mileage are in demand right now this is what the manufacturers are striving for so that they can sell more vehicles. The supply of cars is plentiful; I think they rarely ever run out of cars to sell. With the right amount of money you can buy anything you want. Cars will always be in supply and demand because they are so necessary. It is easy to get your family places, and vehicles usually hold their value if you are a smart shopper. Good cars are in demand, when cars have recalls or bad ratings, they sell way less because there are so many other options. For example when Toyota had the break recalls, about 60 people died from the brakes failing and the accelerator sticking. This scared consumers and they stopped buying Toyota. This is a positive for other car manufacturers because now they could sell more of their cars to old Toyota customers. A substitute for my product which is a Honda would be other car manufacturers that are just as popular. For example Chevrolet and Ford when their products go up in price and my product stays the same then my product is in demand. Honda is very reliable and they make good vehicles. Chevrolet in my experience holds up better than Fords. However all three are very popular so it is up to the consumer as to which one they will pick. I know that the first thing to look at is the overall appearance of the new car and the performance. After those factors are decided, you look for a vehicle with good gas mileage. Another way that manufacturers have to compete is with the financing and buying options. Many cars have the same quality so the deciding factor comes down to who has the best deal. Many companies have started with no interest for 3 years. This is a very big deciding factor because people will be paying more on their actual car and not an interest payment. Vehicles are expensive to make. When the price of the complementary goods goes down, then the vehicle price can go down as well. For example a motor, when the price of the motor goes down, so will the car. This in the end will sell more vehicles because it is affordable and a quality product. Price elasticity will change when the demand of a product goes up, more than likely when the economy gets better. Right now people are just looking for the best affordable deal.