Bread is one of the products that are consumed every day in almost every household globally, especially based on the surging demand for bakery products. With increasing concerns about fast foods that contain a lot of sugar and salt, many people are shifting to bread because it is healthy. Consequently, the bread and bakery market has been experiencing positive growth for the last decade and the trend is expected to increase in the future. However, like any other product, the demand, and supply of bread is influenced by many factors.
The primary factor influencing the demand for bread is the price. In many cases, there is an inverse relationship between the demand and price of any commodity, which means that an increase in price leads to a decrease in demand. At the same time, a decrease in price leads to an increase in demand ( Rabbi et al ., 2013) . Therefore, the demand for bread will increase if its price falls and it will decrease when the price surges. Hence, the price is the major factor determining the demand for bread. The second major factor influencing the demand for bread is the income of consumers. The demand for bread is likely to surge when the incomes of consumers increase, particularly in low-income households. People who were initially not able to consume bread because of financial constraint will buy it when their income rises.
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Besides, the demand for bread is influenced by the price of available substitutes in the market. The demand for bread will increase if the prices of its alternatives rise. On the contrary, the demand for bread will reduce if the prices of its alternatives in the market reduce. Besides, the demand for bread is influenced by the taste and preferences of consumers ( Rabbi et al ., 2013) . For instance, the demand for the bread is likely to increase if it is attractive to consumers. Therefore, the demand for the product is mainly influenced by its price, income of consumers, the price of alternatives, and consumer taste and preference.
Like demand, the main factor influencing the supply of bread is the price. However, unlike demand, price and supply are positively related. As a result, the supply of bread will increase if its price increases. Conversely, the supply of bread will reduce when its price falls. Apart from the price, the supply of bread is significantly influenced by the cost of production. An increase in the cost of production results in a decrease in the supply of bread in the market ( Brækkan, 2014) . Another factor influencing the supply of bread that is related to the cost of production is the cost of transportation of products to the final consumers. The supply of bread is likely to reduce when the cost of transportation is high ( Brækkan, 2014) . At the same time, technology influences the supply of products like bread. Advancement in technology is most likely to increase the supply of bread, especially because of the enhanced efficiency and effectiveness in the production process. As a result, the supply of bread is mainly influenced by price, cost of production, and technology.
The equilibrium price is attained when the demand is equal to the supply of a given product, which in this case is bread. Both buyers and sellers are satisfied at the equilibrium price. Therefore, a further increase in the price of bread is likely to cause surplus while a decrease in price at the equilibrium will lead to a shortage in the market. An increase in demand without a change in supply will lead to a rise in the equilibrium price ( Brækkan, 2014) . For example when the household income increases, the demand for bread will increase, leading to a shift in the demand curve to the right.
Consequently, the equilibrium price will increase. On the other hand, an increase in supply reduces the equilibrium price of bread if the demand for the product remains constant, especially due to an upward shift of the supply curve ( Brækkan, 2014) . Hence, a change in supply and demand affect equilibrium price of bread.
Finally, the demand for bread is likely to increase in the new future, mainly due to a change in lifestyle and consumer taste and preferences. Many consumers are currently looking for healthy foods that cannot lead to health complications such as overweight and obesity, and bread is one of the best alternatives in the market (John, 2017). At the same time, many consumers are now purchasing foods that can conveniently be acquired and consumed. Bread is readily available for consumers, and it is associated with convenience. Therefore, consumer taste and preference is likely to increase the demand for bread in the future. Besides, the increasing middle-class people is likely to increase the demand for bread in countries such as China in the future. For instance, the demand for bread in China is rapidly increasing.
Bread is one of the most common and popular products that is consumed globally. The rising consumption of bread is increasing its demand and supply. Besides, with rising cases of obesity and overweight, which are linked to the consumption of unhealthy food, the demand for bread will increase in the future. Bread should be cheap, readily available, and healthy for its demand to continue growing.
References
Brækkan, E. H. (2014). Disentangling supply and demand shifts: the impacts on world salmon price. Applied Economics , 46 (32), 3942-3953.
John, J. (2017, January 3). Bread and baked food market growth to hit $157.18 Billion by 2021. Globe-News . Retrieved from https://globenewswire.com/news-release/2017/01/03/902641/0/en/Bread-and-Baked-Food-Market-growth-to-hit-157-18-Billion-by-2021.html
Rabbi, F., Ahmed, T., Saha, A., & Sutradhar, P. (2013). Identification of causes of demand variation and its impact on sales volume-an exploratory study in the processed food industry in Bangladesh. European Scientific Journal, ESJ , 9 (22).
