Every organisation which provides goods or
services to fee paying customers must, by its very
nature, charge price for that good or service, to
pay for its costs, have retained profits for
investments and to keep its shareholders happy. In
theory, the market price of any good or service is
determined by the interaction of forces of demand
and supply. There is an old saying, that “if you can
teach a parrot to say ‘demand’ and ‘supply’ you
have created a trained economist.”1 There is some
truth to this saying as most problems in the
economics can be examined by applying the rules
of demand and supply. Therefore, the concepts of
demand and supply can be claimed to be among
the most important in economics. In order to
understand either of them it is necessary to
examine the factors that determine them. Although,
a good’s price relative to other goods is probably
the most important factor influencing demand for
most goods most of the time, there are other
factors as......
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