Comparison of Individual Economic Circumstances in Canada and Another Country

This paper compares the economic circumstances of Canada and another country by analyzing the influences on supply and demand in both countries. The paper includes an interview with a partner from Australia and highlights the differences in market size, number of sellers, and products offered. The paper also discusses how consumer behavior impacts the demand side of the economy and how changes in factor prices impact the equilibrium of the market. The differences between the economy of Canada and Australia are due to the factors that influence the supply and demand of the market.

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MICROECONOMIC ASSIGNMENT
FINAL PROJECT: APPLYING KEY CONCEPTS TO A
COMPARISON OF INDIVIDUAL ECONOMIC
CIRCUMSTANCES IN CANADA VERSUS SOME OTHER
COUNTRY.

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Table of contents
Introduction................................................................................................................................3
Interview with the partner..........................................................................................................3
Analysis of the interview...........................................................................................................4
Conclusion..................................................................................................................................5
References..................................................................................................................................6

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Introduction
One of the main reasons for the differences in characteristics of different economies is
the different type of behaviours of the consumers of the market. The aim of this paper is to
carry out the interview and extract information of influences on supply and demand in case of
Canada compared to another country of the world. The influences on the supply and the
demand refer to the factors that impact the decision making of the customers and the sellers
of the market. This decision to sell or to buy also impacts other economic concepts such as
the price, quantity produced, resource allocation and many more. The paper also reviews the
finding of the interview and analyses the differences among the selected countries.
Interview with the partner
The main topic of the interview is the influences on supply and demand of products
and services in the market. The home country of the interviewee is Australia and the analysis
is done regarding the differences in the economic components between the chosen countries.
As per the interview, there exist a lot of differences between the economic circumstances of
the selected countries. Interviewee highlighted that “The market size and the number of
sellers in the market are same as that of Canada. However, the number of products offered by
each of the organisations is less in case of Australia”. Apart from that, seasonal changes in
the behaviours of the customers are also much significant compared to the case of Canada.
Interviewee, on being asked how consumer behaviour impacts the demand side of the
economy stated that "The seasonal changes impact the buying pattern of the customer and
hence almost all the products reflect a changing market price throughout a financial year”.
The interviewee also highlighted that changes in the factor prices also impact the equilibrium
of the market as seller reacts immediately by reducing the supply for a given price. The
interviewee stated that "With the increase in the wages of the labours of the market, the cost
of production of the market increases which reflects in the price of each of the products".
Lastly, the interviewee stated that “government of Australia levies price ceilings in order to
control some of the market prices of the products such as cereals.”

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Figure 1: The rightward shift in demand
(Source: Solomon et al. 2014)
Analysis of the interview
The data and the information gathered from the interviewee highlights that market
economics of the selected countries are different due to the factors that influence the market
forces. The huge number of buyers and sellers in Australia ensures that none of them has
control over the prices of the market. This implies that the demand curve is given for the
individual sellers and the supply curve is given to the individual buyers (Xiang, Magnini &
Fesenmaie, 2015). Apart from that, the factor that differentiates among the characteristics of
supply and demand in the country is the behaviours of the consumers. The weather
fluctuations are significant in the case of Australia and hence their buying pattern is highly
influenced by the changes in the temperature. For example, in the summer in Australia, the
demand for ice cream goes up shifting the demand curve to the right side. On the other hand,
summer does not drop the temperature much as compared to the case of Australia. Therefore,
the demand for ice cream remains constant over the years. Furthermore, the products
alternatives in the case of Canada are more than that of Australia leading to the differences in
the culture of the citizen. Thus each of the markets is smaller compared to that of Australia
and hence enjoys some amount of control over the prices of the market. In case of Australia,
the sellers and the buyers, being huge in number hardly controls the prices of the market.
Again as figure 2 suggests, the price ceiling used by the government of Australia also creates
in a shortage of supply in the market which calls for rationing. This is also missing in case of
Canadian market economy.

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Figure 2: Price ceiling
(Source: Solomon et al. 2014)
Conclusion
Therefore, the differences between the economy of Canada and Australia are due to
the factors that influence the supply and demand of the market. All these forces either supply
and demand as mentioned in the study in order to set the equilibrium prices in the market.
While the market economy of Australia is restricted due to the actions from the side of the
government, the market economy of Canada follows lazes faire, characterised with a high
price and higher control of sellers over the prices of the products.

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References
Solomon, M. R., Dahl, D. W., White, K., Zaichkowsky, J. L., & Polegato, R. (2014).
Consumer behavior: Buying, having, and being (Vol. 10). Pearson.
Xiang, Z., Magnini, V. P., & Fesenmaier, D. R. (2015). Information technology and
consumer behavior in travel and tourism: Insights from travel planning using the internet.
Journal of Retailing and Consumer Services, 22, 244-249.