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Effects of monetary and fiscal policy
Effects of monetary and fiscal policy
Effects of monetary and fiscal policy
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Supply and Demand, in economics is the relationship between the amounts of a Product that the producers are selling at a various prices and the amounts of the consumers desire to buy. There is a law in the Supply and Demand which explaining the interaction between the supply of the product or resources and the demand of it to the consumers. Both of it is connected to each other. The Law of Supply and Demand pull against each other that cause to it to increase or decrease in some various ways. There are so many factors that can affect both supply and demand.
Here are some factors that affect the supply of the product. One of the most common factors that affect the supply of the product is the Weather because some or many of the products
Let’s begin with the theory of Scarcity. The concept of demand is directly relatable to the scarcity of an item. Let’s look at Jackson Pollock’s work for example. If only 20 paintings were available created by Jackson Pollock, there would be a much greater demand than if you could purchase them easily at your local art gallery.
We the consumer would rather pay less for any product that is needed or want. Ultimately we are the reason for high prices as well as low prices. Prices of products do not always stay the same and more popular products have higher prices than less popular products. These fluctuations, high prices and low prices are from the idea of supply and demand. Supply and demand defines the effect that the availability of a particular product and the desire or demand for that product has on price. Generally, if there is a low supply and a high demand, the price will be high (Investopedia). To understand the idea of supply and demand, the understanding of supply and the understanding of demand must be defined. The Law of Supply states that at higher prices, producers are willing to offer more products for sale than at lower prices, also that the supply increases as prices increase and decreases as prices decrease (Curriculum Link). The Law of Demand states people will buy more of a product at a lower price than at a higher price, if nothing changes, at a lower price, more people can afford to buy more goods and more of an item more frequently, than they can at a higher price and that at lower prices, people tend to buy some goods as a substitute for others more expensive (Curriculum Link). In todays economics these ideas are seen frequently in everyday life. The laws of supply and demand are seen in many ways in the company Apple Inc. Each year Apple Inc unveils a long awaited mobile operating system and IPhone. We can also see many aspects of the law of supply and demand in Nike Inc’s Jordan Brand. Jordan Brand has released a number of...
In market choice consumers carry the power. Consumers demand products through their willingness and ability to purchase products. As a result of their demand, firms supply or produce goods to satisfy consumers. Both supply and demand can be graphed on supply and demand curves with price as the independent variable and quantity as the dependent variable. The demand curve follows a negative slope, so as the quantity demanded increases price decreases. The supply curve follows an opposite, positive curve, as the quantity supplied increases, so does the price. Looking at both on the same axis we can recognize how supply and demand relate. To see the supply and demand curves for a product, we would look at the quantity supplied verses the quantity
In Book V of his Principles Alfred Marshall describes what he denominated “the state of arts” of the supply and demand theory, going back to Adam Smith. The assumptions then applied to the matter was that 1) demand comes first, 2) it is up to sellers to adjust supply to demand through production and marketing, a mix where the price is the most important variable, and 3) production takes time. Marshall summarized statement 2 later on into a single phrase: “Production and marketing are parts of the single process of adjustment of supply to demand” (MARSHALL, 1919, p. 181). This set of three assumptions suggests that the basic principles of the supply and demand theory collected by Marshall from the work by some scientists were then laid, requiring therefore only the right mathematical treatment.
In economics, particularly microeconomics, demand and supply are defined as, “an economic model of price determination in a market” (Ronald 2010). The price of petrol in Australia is rising, but the demand remains the same, due to the fact that fuel is a necessity. As price rises to higher levels, demand would continue to increase, even if the supply may fall. Singapore is identified as a primary supplier ...
The American auto industry is in a crisis, their vehicles are not in demand and they need government bailouts to keep their businesses afloat. American vehicles are not on demand because people want fuel-efficient, the car companies that are not at the point of bankruptcy, longer lasting vehicles, and hybrid cars. The American car companies are at a point of bankruptcy and people don’t want to buy cars from a company that may not be there in a couple of months. The foreign car companies are doing well and they much more dependable now that we are in an economic crisis. American cars are not fuel-efficient, not as long lasting, and don’t make many hybrids, so this affects their business negatively. I got some ideas that will make American car companies be on top of the industry again.
The law of demand states that if everything remains constant (ceteris paribus) when the price is high the lower the quantity demanded. A demand curve displays quantity demanded as the independent variable (the x-axis) and the price as the dependent variable (the y-axis). http://www.netmba.com/econ/micro/demand/curve/
Price gouging is increasing the price of a product during crisis or disaster. The price is increased due to temporal increase in demand while supply remains constrained. In many jurisdictions, price gauging is widely considered as immoral and is illegal. However, from a market point of view, price gouging is a correct outcome of an efficient market.
i. The economy is said to be ‘booming’ when demands for certain products and services rise. When demand rises, the prices will also increase. Increase in price can boost up the company’s profit. This enables companies to hire more workers thus increasing the numbers of employments. The increase in company’s profit also allows employers to raise the employees’ wages. When companies have more workers, they would be able to produce more products. Overtime, these outputs will then be sold to the people with jobs at a higher price because of the scarce amount of resources available.
... quantity of helium supplied has also decreased due to refinery closures and privatization which this is a determinant of supply known as “decreasing number of sellers”, which will cause a rise in the prices of helium. As the number of sellers in this particular market decreases, our supply of helium decreases as well shifting the supply curve. Also, we have a change in a non-price determinant of supply such as the cost of factor production, which equals to a change in supply. This change in supply shifts the supply curve to the left because helium is becoming more difficult to find and the cost of natural resources has increased causing a decrease in the helium supply.
The business needs to identify demand, supply and product related phenomena that influence the demand forecast.
With supply solely, factors involved with regulation of the supply also control some aspects of demand. Things such as production costs and desired net profit can determine whether a business succeeds or not. Having a balance between quantity and price is the greatest control any business can have. Pricing is obviously one of the most beneficial, or destructive, parts of a business. Pricing is the first and most valuable thing an individual will look at, which will overrule most other judgments based off of quality and detail. Balancing the price, however, helps to create a pristine product, with just the right amount of detail that will fuel the market, while still generating a steady net income.
When it comes to the supply, demand and price of coffee there are certain factors that can fluctuate these characters to rise or fall. Weather is one example that affects the consumption of coffee.
When a suppliers' costs changes for a given output, the supply curve shifts in the same direction. For example, assume that someone invents a better way of growing corn so that the cost of corn that can be grown for a given quantity will decrease. Basically producers will be willing to supply more corn at every price and this shifts the supply curve outward, an increase in supply. This increase in supply...
When the price of raw material will go up or down, the production coats will rise or fall. Secondly, the price of substitute products also affect the supply curve. Because the relatived products are competitive relationship, when the price of one product goes up, another will goes down. It will affect suppy. Thirdly, production technology will affect the supply curve. When the level of technology is rising or falling , the production costs will go down or up. finally, the government policies will affect the supply curve. Positive policies will make the supply go up, conversely, it will go down. For example, the govenrment limit the amount of cars which people can buy, it will caused the supply curve down. In addition, the price of product in the future and the development of product company will also affect the supply