Econ 545 paper 1

Running Head: DETERMINANTS OF DEMAND AND SUPPLY 1

DETERMINANTS OF DEMAND AND SUPPLY 8

Project Paper One Outline

ECON545 Paper Project 1

Scenario Chosen: A

Business Economics

May 10,2016

Introduction

This case will determine, if my niece should attend college to become a doctor and the best school to attend. By doing the proper research, I am hoping to supply my niece with the best advice, depending on my findings, such as; the high costs of tuition and the years of study involved in becoming a doctor. This helps evaluate if that career choice is an optimum decision for her.

Section 1: Demand Determinants

The law of demand

The law of demand has a direct correlation to the employability of a person who intends to study to be a doctor. The law of demand states that the requirement for a commodity is inversely proportional to its cost or price for any particular product or commodity (Sraffa, 1926). The cost of studying a particular course, therefore, plays a role in dictating its affordability and accessibility to the various individuals. The likely scenarios that would occur if tuition fees are hiked will also be evaluated; the research will be keen to establish whether more people would be willing to enroll for the course even if tuition fees were increased. Factors that would inform their choices to consider enrollments even to the course amidst higher costs will even be explored with keen interests.

A: Determinates

- Population:

The total number of students that cleared high school will determine the level of demand for the course. The higher this population is the higher the demand for the course.

- Income: 

My niece’ income would be the second factor for consideration. I would seek to find out her level of income together with her already accumulated wealth. I will also examine her ability to cover comfortably all the fee components outlined for her preferred course. It would be imperative that my niece evaluates her assets and sources of income to understand whether she would comfortably finance her education

- Cost of Related Goods:

Very other important factors that would also help my niece in making the decision on her preferred course includes related courses, their costs of study, marketability, duration of study and technicality. Related courses offered by an individual department will be evaluated and their merits and demerits enlisted to highlight the most favorable course to pursue.

- Tastes:

The study will also seek the third aspect of likability. How fundamentally does college going person fancy to study to become doctors? If several people do and have the means to pursue their academic desires, then technically there would be more qualified doctors within a given locality. Such a reality would, therefore, undermine the demand and employability of physicians in a particular geographical area.

- Expected Future Prices:

My niece should also consider the future fees for the course. She should choose the course if there are expectations of the fees to go down. However, if she expects the fees to go up, she should consider other courses.

 

B: Price Elasticity of Demand 

Elasticity of demand measures the responsiveness of quantity demanded to the price. The higher the price elasticity of demand the more a change in the fees will affects my niece choice of course.

C: Graph of Demand 

 

Section 2: Supply Determinants

My research away from the factors related to market will also find out determinants of the factors of supply (Brunner &Meltzer, 1964) that dictate for example the amount of fees required for such courses.

A: Determinates

-Prices of Inputs:

The presence of adequate learning equipment, theater rooms and capacity to handle proper learning exercises will be determined. Appropriate and efficient learning material often justifies relatively high tuition fees.

-Technological Change:

Technology influences the extent to which learning institutions and education equipment can be manufactured.

- Number of Firms in the Market:

The presence or absence of medicine as a course in various learning intuitions can somewhat be linked to lack of finances and technological advances by such institutions.

- Expected Future Prices: 

 Where there is an expectation of fees to increase, there will be a higher supply of the course and vice versa.

Ai : Profit Max/Cost of Production Analysis 

The prices in this market are determined by the industry thus making the universities mare price/fees takers. It is not possible for firms here to charge substantially higher fees than what the industry gives. Firms maximize profits where MC are equal to MR.

Aii :  Number of Sellers, Market Structure

The market structure that can be used to explain the industry is perfect market structure. This is because there are many firms in the industry and also many buyers. Moreover all the players in the market have perfect information on the products offered and prices.

B: Price Elasticity of Supply 

Price elasticity of supply refers to the responsiveness of supply to the levels of prices of goods. The higher the elasticity, the more the price has an impact on the quantity suppled.

 

C: Supply Graph

 

Section 3: Recommendations: 

Lastly, the numbers of students willing to pursue medicine do have a direct impact on the availability of courses offered at various institutions of higher learning. Most institutions often carry out their background surveys to determine which courses have had an increase in demands. The managements of such systems often responds to such increased demands by doubling student intakes to such courses, increasing labor within the respective departments and expanding infrastructure to accommodate soaring number of learners. My niece would be advised that the presence of several institutions offering a similar course, probably do so in response to changing and growing educational needs from the people living in certain areas.

Reference

Borucke, M., Moore, D., Cranston, G., Gracey, K., Iha, K., Larson, J., ... & Galli, A. (2013). Accounting for demand and supply of the biosphere's regenerative capacity: The National Footprint Accounts’ underlying methodology and framework. Ecological Indicators, 24, 518-533.

Brunner, K., & Meltzer, A. H. (1964). Some further investigations of demand and supply function for money. The Journal of Finance, 19(2), 240-283.

Milner, J., & Holston, B. (2015). Building the supply and demand for evidence in the Every Student Succeeds Act.

Petroff, J. (2013). Demand and Supply.

Sraffa, P. (1926). The laws of returns under competitive conditions. The Economic Journal, 36(144), 535-550.

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