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Explain what factors cause changes in demand and supply

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Market Supply and Market Demand

There are many fluctuations in the economy that affect the price of the stock. Changes in supply and demand in the market can affect a firm's profitability. Unexpected news that benefits a company can increase the price of its stock. Unexpected news that harms a company can decrease the price of its stock. Using the Coca Cola Company, address the following questions:

1) What good or service does the Coca Cola Company produce?

2) What are some factors that would cause a change in demand for this good/service? How does quantity demanded of this good/service change?

3) Give some examples of changes in supply in the context of Coca Cola's goods. What would change the quantity supplied?

4) Take a look at the stock price today for the Coca Cola Company. Compare this price to the price about three months ago?

The following link will allow you to find historical and present stock quotes:

http://finance.yahoo.com/q/cp?s=^DJI

Click on Coca Cola Companies stock. When you open the "historical prices" (left column), set the dates accordingly (sort by monthly). You should use the column labeled "Adjusted Close." This will adjust the price for dividends and splits.

Did the stock price go up or down or stay relatively the same? Discuss one thing in the market that could explain the change in price. For instance, the price of Toyota stock (not in the DOW 30) was 74.15 as of February 19, 2010 and it was 84.15 on December 19, 2010. This drop could be due to the recall in January 2010.

Explain what factors cause changes in demand and supply in the market.

620 words plus graph of stock price to illustrate point

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Solution Summary

Explain what factors cause changes in demand and supply in the market using Coca Cola as the target company. How does this connect with the stock price?

620 words plus graph of stock price to illustrate point

Solution provided by:
Carol Sargent, PhD
Education
  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
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