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The demand and supply is considered the core of this issue and I will
provide this issue with examples that relate to the cell phone market in order to
show the change in the curves of the supply and demands, and the changes in the
prices.

The prediction about the future affect on the demand and supply. Some people
predict that the prices of the smart phones will decrease in the future because of the
hard competition and the more production of the suppliers or producers.

The graph of Supply and Demand for issue of reducing the price of smart
Phone.

S1

S2
P1

P2
D2

D1
Q

Q1 Q2

International Data Corporation (IDC) issued some estimation for the prices that
may occur in the future, there is lowering in the sales of the mobile phones at
mobile market in Kuwait by 6 % in 2016. The market for cell phones will reduce
or diminished, this is considered as forecast the global technology research. The

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 value of reduction is between 19 % and 22 % yearly. These forecast affected on
the mechanism of supply and demand curve because it is forecasted that buying of
the mobile phones will reduce at 2016. As a result of this issue, the Qd of the cell
phones in the market reduce and the demand curve will shift

Price of PHONES

Supply curve

P1

P2

D1

D2

Q.D of phones

Q2 Q1

Through the economic trend, the GDP of the Kuwaiti is majorly depending on the
oil sectors by 95 percent from exporting the petrol to the different nations in the
world. These affected on the purchase power of the people in the market. These

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 leaded to decrease the demand on the cell phones, and the demand curve for the
cell phones shifted to the left.

Price of PHONES

Supply curve

P1

P2

D1

D2

Q.D of phones

Q2 Q1

Factors impacting on demand

The individual demand curve is correlating to the prices which relate to purchasing
quantity of goads.
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 The market demand curve is composed of many individual demand curves.

1. Change in price

The moving in the Demand Curve could be happen from movement in price.

the condition of moving in the price level for the goad will lead to changing over
the Demand Curve.
P

400

385

370 D

Quantity
20 m 25 m

According to the different operations at Apple Company, the management of apple

company decided to reduce the prices level of iphone6 from 400 $ to 370 $. These
leaded to maximize the demanded quantity for this iphone from 20 million to 25
million in the different markets.

Movement in the demand curve

At the same prices, demand curve can be changes and moved. The customer can
buy specific amount of product whether small or big.

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 D2

D1

P1

QUANTITY

Q1 Q2

Diagram to show shift in demand

S
P1

P2
D2

D1
Q.S of tobacco

Q1 Q2

There are many reasons that lead to shift the demand curve:

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Income: - the customers are depending on his income or salary in order to purchase
and demand the products. When his income or salary is big, the demand on the
product will increase and the demand curve will shift to the right. There are
numerous factors that positively affect on the income like the salaries, commission,
and fees.

Quality: - the customers were seduced to purchase the iphone 6s because of its
high quality as the pixel cameras of this phone is very high and other imagines
features.

The effective methods of advertising and innovative ways of making adv have
positive effect on the loyal and increased the demand. Marvel’s Avengers
advertisement that was done by the Samsung Company leaded to support the
demand on the product of Samsung. (Gregory Mankiw,2014).

Substitutes: - the massive prices of substitutes like; if the prices that is imposed by
the Samsung company for the smart phones increased, these leaded to increase the
demand for iphone because the Apple Company is substitute for the SEC.

Complements: - the demand of the cell phones will be supported in the case of
reducing the prices of the complements.

The production for the price; the customers harried to purchase iphone 7s now
because there are predictions that predict that price of this phone will increase.

Determinants of supply of the mobile phones

Prices of related goods: - this affair is correlated to the factory which design and
manufacture the cell Phones. During this period, the prices that relate to the smart
watches increased to the high rate. The apple company becomes more interested in
produce smart watches more than iphone in order to get high rate of profits. These
leaded to reduce the supply of iphone.

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Technology: - the firm can produce in efficient way on the basis of depending on
innovative technology that support and pushed the company to more production.
The high level of innovation will cause to reduce the cost of production. The
equilibrium quantity of iphone was raised and the supply curve of iphone shifted to
the right because of relying on innovative technologies, these leaded to increase the
supply of iPhone 6.

Prices of inputs: - when the prices of inputs rise, the cost of producing the product
will increased. These leaded to decrease the quantity supplied of the product. The
production of iphone depends on many materials like gold and platinum. The
prices of these inputs in the last period was increased, these leaded to increase the
production cost of iphone. These caused to reduce the supply of the iphone and the
supply curve of iphone will shift to left.

Expectations: - the management of the Samsung Company may make expectations

about the prices and the innovation in the future, these will affect on the QS of the
smart phone.(Uk essays,2015).

Number of sellers: the more producers who produce the smart phone, the more the
supply of the cell phones in the market.

The market in Kuwait carries many factors that affected on demand and supply for
Samsung products. The demand mechanism for the smart phones can be affected
by the price. The customer’s income is considered as effective operator in order to
buy the cell phones. The price of Galaxy Note 2 is 200 KD, while the average
income of Kuwaiti citizens is KD 300. Thus, the demand for the Galaxy Note 2
decreased because the customers refused to pay most of their salary to purchase the
phone. The demand curve of the cell phones in the Kuwaiti market was affected by
the number of the producers or the scale of production of cell phones.

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The market full of companies and competitors who produce the smart phones in
the market, Samsung and apple are considered the largest. For instance; when
Galaxy S3 existed or produced, the different customers harried up for purchasing
it. After the producing the Iphone5, the demand for the Galaxy S3 reduced.

In conclusion, the market of cell phone will be the best example for showing
the mechanism the demand and supply in the market. There are many factors in the
market that affect on the supply of the cell phones like because the depending on
high technology by the company that produce the cell phones, this will increase the
supply of the cell phones in the market, this will lead to reduce the prices of the
product and the demand curve will shift to the right. The economic conditions in
Kuwait considered effective factors that affect on the demand and supply of the
cell phone at the market.

The export of oil represent about 95 % in the GDP of the country of Kuwait (The
odora,2014). The OPIC diminished the price of the oil crud, these leaded to
negatively affect on the lifestyle of the customers in the state of Kuwait. So, the
purchase power of the customers in Kuwait no longer high. These leaded to
decrease the demand for the cell phones. These pushed some new entrants to
produce new smart phones in order to fit with the market with reasonable prices
like: VSun, Xtouch, and etc

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Reference

Jennifer Ryan, 2005, Economics, Springer US, ISBN: 978-0-387-23490-8

Michael Parkin ,2011,Microeconomics (10th Edition) (Pearson Series in

Economics)

N. Gregory Mankiw,2014, Principles of Microeconomics, 7th Edition (Mankiw's

Principles of Economics)

The odora,2014,Kuwait economy, , visited in 27-11-2016, available at :-

http://www.theodora.com/wfbcurrent/kuwait/kuwait_economy.html

Uk essays,2015, Factors That Determine The Demand And Supply Economics

Essay,visited in 27-10-2016, aviable at :

https://www.ukessays.com/essays/economics/factors-that-determine-the-demand-
and-supply-economics-essay.php