SUPPLY AND DEMAND
Temperature– On relatively hotter days, there is a possibility that more students will turn up to buy
ice-creams. On days when temperature is low, the buyers may not turn up.
2. Income- Considering the target audience is school students, their income sources are limited. At
the 1. Temperature– On relatively hotter days, there is a possibility that more students will turn up to
buy ice-creams. On days when temperature is low, the buyers may not turn up.
2. Income- Considering the target audience is school students, their income sources are limited. At
the most, they rely on their pocket-money or part-time earnings. Together with temperature this too
can be another reason for fluctuations in sales.
3. Availability of close substitutes– Even though ice-creams do not have an exact substitutes, there
can be close substitutes which can be availed by the students. For examples- Eating out in
restaurants, Slushies or even other sweet dishes can serve as a close substitutes for the students.
If the school allows another competing students to sell ice creams then the supply of ice-creams will
increase in the market. As a result, the equilibrium price has to be lowered so that the stock of ice
cream can be cleared by both sellers. Competitive pricing will benefit the students who’s consumer
surplus will increase due to lower prices. If both sellers charge same price, then the sales may be
evenly distributed between both sellers. In such a scenario, both sellers may even act in collusion
and charge a higher price to exact a greater surplus from the market.
The factors that cause shifts in demand for ice cream are as follows : –
• Price .
• Tastes
• Income
• Population of students
