The supply and demand

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The precise estimation of the market for goods and services is a critical principle in maintaining company income. Small businesses can suffer as a result of insufficient planning on issues relating to demand and supply. Demand calculation often involves complex balances that involve price and supply, as well as appropriately adopting consumer expectations and desires (Azevedo, Eduardo and Jacob 1254). Profits are typically reduced when demand conditions are judged incorrectly. Paying wages for less profitable corporate operations or resources often lowers a company's earnings. Several factors influence the market for goods and services in various industries. Some of the factors include costs, prices, expectations and preferences, and population shifts. The ice-cream vendor in the above case may experience a shift in demand due to population shift, variation in income, and a shift in population.

The demands of ice cream in the campus fluctuate due to the level of income at different times. There are times when the sales increases; when students have enough cash to sustain them in different programs, they often use the extra balance to buy cheap food items like ice cream. Their students with high level of income usually spend most of their cash on the luxurious items like chewing gum and ice cream (Bodie 72). The demand for ice cream often increases as a result of an increase in the environmental temperature, at the various times of the day there are moments when the is high temperature and student frequently turn to ice cream to quench their thirst, the demand therefore increases. In the evening when there is no sunshine, the demand usually drops due to the preference of hot drinks.

The population shift is another factor that influences the demand for the ice cream in a campus. During the weekend, the population of the students within the campus usually reduces as a result of engagement in different external activities. During these periods, the ice cream vendors usually record low sales due to the reduction in the population of the customers. During the weekdays the student population often increases due to the high number of internal activities like learning and other cultural events. On the other hand, during the night, the demand for ice cream normally reduces due to the reduction of the number of schools activities.

The demands of the ice cream usually increase with the nature of activities within the campus (Ruttan and Colin 51). During the sporting activities and other social events, there is always a large number of students who take ice cream to increase the amount of water in their body system. The physical activities often lead to thirst hence the need for ice cream. The social events will also increase the number of buyers i.e. customers. The increase in the number of sales will lead to the increase in the number sales hence high profits.

The inception of the new ice cream vendor into the campus will cause a shift in pricing. The prices of ice cream will fall due to the increase in the number of supplies. During the peak hours, both the vendors will realize huge profits while during the times when the sales are low, the vendors will record huge losses. The operation of the new ice cream vendor will increase the supply of the ice cream while decreasing the demand, the reduction in demands will also lower the prices and thus the market will reach the saturation point.

Works Cited

Azevedo, Eduardo M., and Jacob D. Leshno. "A supply and demand framework for two-sided matching markets." Journal of Political Economy 124.5 (2016): 1235-1268.

Bodie, Zvi. Investments. McGraw-Hill, 2013.

Ruttan, V., and Colin Thirtle. The role of demand and supply in the generation and diffusion of technical change. Vol. 21. Routledge, 2014.

November 17, 2022
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