supply and demand

posted in: Microeconomics | 0

 

supply and demandThe principle of supply and demand is relatively simple, only it be goods and services provided by sellers, if someone is willing to buy them.

Supply

When listing the amount of existing goods and services is on the market referred to that demand, however, is only the intention of households and enterprises, goods and services for money or other goods in exchange for purchase.

Demand

Demands regulate in a free market economy the equilibrium price, this arises when supply and demand match a. Any good and service that has a price is usually scarce and thus not unlimited. The price determines the value of a service, a good. If the price is too high, the demand for this commodity will drop automatically, with the exception of luxury goods. They serve as statistic symbols, here the demand can even rise.

supply and demand

If the quantity offered increases and the demand remains the same, the price of the goods decreases, for example the harvest of apples is very high, more apple juice can be produced, but the demand remains unchanged, the price of apple juice decreases .

If, on the other hand, the supply and demand remain the same, the price of the commodity increases, for example, if the apple harvest is very low due to early frost, the price of apple juice increases if demand remains the same.

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