Question

decision point: determining supply and demand
after some thought, youve decided to use the principles of supply and demand to determine the
market (or equilibrium) price of your coffee. consider the following pieces of data. which would help
you determine supply? which would help you determine demand?
drag the data onto the correct side of the scale and click submit.
supply
demand
per capita spending of
college students in the area
number of similar products
available for sale on campus
cost of coffee/supplies used
to produce your product
labor costs for your
employees
your fixed costs(rent, utilities)
enrollment trends for the last
5 years
number of students on
campus

Explanation:

To determine supply, we consider factors related to production costs and the availability of similar products (as they affect how much we can offer). For demand, we look at factors related to consumer behavior and the number of potential consumers.

Supply - Related Data:

• Cost of coffee/supplies used to produce your product: Directly impacts production cost, hence supply.
• Labor costs for your employees: Part of production cost, affects supply.
• Your fixed costs (rent, utilities): Fixed costs influence production capacity and supply.
• Number of similar products available for sale on campus: More similar products mean competition in supply, but also relates to market supply conditions.

Demand - Related Data:

• Per capita spending of college students in the area: Shows purchasing power, affecting demand.
• Enrollment trends for the last 5 years: Indicates potential consumer base growth, affecting demand.
• Number of students on campus: Directly relates to the number of potential consumers, affecting demand.

Answer:

Supply:

• Cost of coffee/supplies used to produce your product
• Labor costs for your employees
• Your fixed costs (rent, utilities)
• Number of similar products available for sale on campus

Demand:

• Per capita spending of college students in the area
• Enrollment trends for the last 5 years
• Number of students on campus