2. HOW THE LAWS OF DEMAND AND SUPPLY AFFECT THE NASDAQ100
The Nasdaq100 is basically one of the biggest advancing index funds in the world with most of its constitutes been top-notch technology, Consumer-based stocks, and the Health sector with the largest market caps which includes: Apple, Microsoft, Alphabet, Amazon, Tesla, Facebook, Nvidia, Cisco, Netflix, Starbucks, Gilead Sciences, Zoom and so on.
Based on the current market trend we can very well see that most of these companies were affected, now the need for supply comes in. According to Supply which simply means “to provide or make” in layman’s terms, most people/consumers of this commodity have a need for these products in times like this and In turn, lead to more Demand for those commodities/products. For example, The need for Zoom came in place due to the “work-from-home” policy, so people saw the need for a zoom which in turn made zoom provide people with the necessary essentials for that sole purpose.
So according to the Laws of Demand and Supply;
- If demand increases and supply remains constant, then it leads to higher equality in price and higher quantity.
- If demand decreases and supply remains constant, then it leads to lower equality in price and lower quantity.
- If supply increases and demand remains constant, then it leads to lower equality price and higher quantity.
- If supply decreases and demand remains constant, then it leads to higher equality in price and lower quantity.
When an item is scarce but many people want it, the price of that item would rise. If the supply is more but the consumers’ desire is less the price will fall. Supply and demand rise and fall until they achieve balance. When this balance is achieved the market is said to be at equilibrium. So currently we expect more bulls in this index until a need for these products arises.