Supply and demand
Economics is a subdivision of social science that deals with the factors that determine the production, dispensation, and utilization of goods and services. According to what I have learned during high school, Economics is a study about different issues regarding on people 's wants and needs. It also deals about taxation, supply and demand, management and anything related in business. It is also a study about how we live and how we produce and consume different things in our everyday lives.
According to Nolasco, Liberty. Ong, Jerome et.al (2010), It focuses on critical thinking and responds to circumstances or difficulties from the so-called economist 's perspective. Economics is the
…show more content…
As we study economics, we will get to know the different fundamental concepts in order for us to understand it and learn more from it.
One of the fundamental concepts of economics is the Supply and Demand. Supply and Demand for me is about how such business develops and become successful. It is all about how people handles different businesses in order for them to achieve what they want. According to my understanding, Supply refers to things that is being brought and distributed by different companies while Demand refers to the desire or wants of the people but according to Heakal, Reem.
…show more content…
Producers supply more at a higher price because selling a higher quantity at a higher price increases revenue.
There are some factors that affect supply and demand. According to the unknown stock market player. (2012), there are 7 factors affecting supply and demand and these are Financial performance which includes sales revenue, income, debt load, return on assets and return on equity. second is Management which could be a direct correlation to the financial performance of the company. third is Industry Performance which is a manifestation of the industry as a whole. fourth is Social awareness which includes the effect that a business has on society as a whole , then fifth is Legal Issues which involves lawsuits, settlements, and bad press. sixth is Government regulations that involves laws passed by the government which can influence a corporation and last is the Media which plays a major role in how a company is recognized. In short, all these factors affect on how such supply and demand increases or decreases. To sum up all, Supply and demand isn 't just about the product, the money or any resources. It 's about we as a society who deals out
From classroom to a cocktail party, having knowledge in today’s economics is definitely an asset when it comes surviving in the world of business. Cocktail Party Economics, by Eveline Adomait, and Richard Maranta undeniably satisfies as an economic training book, helping you understand the concepts of basic economics. The book brings to light many theories and thoughts, which are explained in a certain way that help readers easily, compare and relate them to each other. During the first couple chapters of the book, the main theories presented are scarcity, value, opportunity cost, production, and absolute/comparative advantage. Believe it or not, all of these theories are relatable to Supply and Demand; the two concepts introduced in chapters six and seven.
The Economy is the backbone to society. There are many factors that operate in, and govern our society’s economical structure. Factors such as scarcity and choice, opportunity cost, marginal analysis, microeconomics, macroeconomics, factors of production, production possibilities, law of increasing opportunity cost, economic systems, circular flow model, money, and economic costs and profits all contribute to what is known as the economy. These properties as well as a few others, work together to influence the economy. Microeconomics and Macroeconomics are two major components. Both of these are broken down into several different components that dictate societal norms and views.
Social – Social factors that affect a company is in regards to the culture of the external environment. The culture of the external environment is developed from the ecological, demographic, religious, educational, and ethnic conditioning. The company’s social factors involve the beliefs, values, attitudes, opinions, and lifestyles of the people included in the external environmental culture.
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/
A change in quantity supplied is just a movement from one point to another in the supply curve. In opposite, the cause of a change in supply is a change in one the determinants of supply that shifts the curve either to the left or the right. These determinants are the resource prices, technology, taxes and subsidies, producer expectations, and number of sellers. An equilibrium price is required to produce an equilibrium quantity and a price below that amount is referred as quantity supplied of zero no firms that are entering that particular business. If the coefficient of price is greater than zero, as the price of the output goes up, firms wants to produce more of that output. As the price of the output goes up it becomes more appealing for the firms to shift resources into the production of that output. Therefore, the slope of a supply curve is the change in price divided by the change in quantity. The constant in this equation is something less (negative number always) than zero because it requires strictly a positive...
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.
In the short run, other things being equal, an increase in demand will raise the price and this, in turn, will cause an extension in supply.
According to Sloman (2003), many people think that economics is about money. Well, to some extent this is true. Economics has a lot to do with money: with how much money people are paid; how much they spend; what is costs to buy various items; how much money firms earn; how much money there is in total in the economy. But despite the large number of areas in which our lives are concerned with money, economics is more than just the study of money. It is concerned with the production of goods and services and the ...
Economics is the study of how best to allocate scarce resources throughout an entire market. Economics affect our lives on a daily basis, whether it is on a business level or a personal level.
In conclusion, generally speaking the Law of Supply states that when the selling price of an item rises there are more people willing to produce the item. Since a higher price means more profit for the producer and as the price rises more people will be willing to produce the item when they see that there is more money to be earned. Meanwhile the Law of Demand states that when the price of an item goes down, the demand for it will go up. When the price drops people who could not afford the item can now buy it, and people who are not willing to buy it before will now buy it at the lower price as well. Also, if the price of an item drops enough people will buy more of the product and even find alternative uses for the product.
Economics is basically the understanding of how different economies function. Economics is the study of how to best allocate scarce resources among competing uses. Scarcity in the economy is the main problem. There are not enough resources to keep up with the demand for them. Within the discipline of economics, there are two areas of study: Micro and Macro Economics.
Managerial economics fits into the topics discussed because this is an area that gives explanation on how resources such as money, technology, land, and labor. It looks on how all these resources should be allocated in a more efficient manner. By understanding managerial economics it is possible to make the right decision regarding all the above topics. The managers have the ability to apply managerial economics to make strategies and solve critical business problems (Rowe,
The crucial importance and relevance of economics related disciplines to the modern world have led me to want to pursue the study of these social sciences at a higher level. My study of Economics has shown me the fundamental part it plays in our lives and I would like to approach it with an open mind - interested but not yet fully informed.
As in any industry, demand is the driving force that determines how well the industry performs.
...n the companies will have to decrease the price otherwise the product will not be sold at higher prices and the revenue would not be as large as companies would like to.