The prices of goods and services are influenced by how much the producers are willing and able to produce, and how much the costumers are willing and able to pay.
Definition of demand: the quantity of a product that consumers are able and willing to purchase at various prices over a period time.
The law of demand says that the price will decrease/increase along with demand.
The national demand, costumers wants which refers to the taste, preferences, etc, and effective demand, the ability they have to pay, make the curve of demand.
Demand curve is based on data, calld demand schedule. These data the companyes gathering over time, for exby checking how much of a product they sold to a particular price, asking the costumers what they think about the price, if they could pay more or less, and why, etc.
The price of a product falls we will buy more, which results in an increase in the quantity demand. On the other hand, if the price of a product goes up, quantity of demand dalls, and the only cause is the change in the price of the product. These changes are referred to as movement along the demand curve, which means that a change in a non-price factor leads to an increase factor leads to an increase or decrease in demand for a product.
Consumers supply is how much more extra the costumers are willing to pay over the market price of a product. Higher price → less consumers.
The change in te curve I sbecause of consumers income, the prices of other products and tastes and fashion.
Definition of supply: the quantity of a product that producers are willing and able to provide at different market prices over a period of time.
The law of supply tells us that for a higher quantity the producer will produce more, because they are willing to afford more to a higher price-> revenue increases.
Supply in the market is decided by the producers: to satisfy the consumers, and to make profit.
The therm can be defined as the quantity of a product a producer is willing and able to produce at different market prices.
The factors of production(land, labor, capital, entrepreneurship) has to be used thoughtfully. These, so the company get maximum profit.
For example: a firm produce mobile phones, and they need: emplying skilled labour, producting at a suitable location, the business skills and contact to survive, and the assembly of components and parts.
The supply curve, is the realationship between price and the quantity of a product that is supplied.
An example for how the curve is, “When the price of a product/service increases, the quantity supplied increases.” These is caused by that when the company got more money from the production, they are able to produce more.
Supply schedule, data set which show how much of a product is supplied over a range of prices.
Past records may help the firms, but in the end it's up to you, as a consumer.
Producer surplus is the willingness a firm have to produce for selling products/services under the market price.
The curve changes because of the size and nature of an industry, and government policies and changes in the cost of the production etc.
Price is important for suppliers and costumers. “The price of any product is determined by demand and supply” this is called equilibrium.
Substitutes(competing goods) and compliments(joint demand)
The demand of a substitude goods depends on the price. If a good, A, costs more than another good, good B, of this type, the costumers will choose to buy the cheapest one, B. Which means that B will experience a increase in demand.
The demand of compliment goods, depends on the price of them both, because they belong toether. Ex: Bread and butter, steal and train etc.
So if the price for, for example, steal goes up and the demand will decrease, there will be more expensive to build trains.
No comments:
Post a Comment