Demands and Supplies in Education and Government

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Our world is energized with constant demand and supplies. Education is no exception. Government demands that children in a specific age group should have school exposure. To this end, the public schools offer subsidies to increase the 'supply' of students (i.e. to attract more students into education). However, the same application of subsidy to private schools does not yield practical intended results as private school education is mostly by choice and does not come under the direct impact of demand and supply, as we will see it. The argument that government should eliminate subsidies to the private schools, is therefore, reasonable. We will discuss why. Theorize What is Demand? In simple terms, "want" is the desire for goods and service, while "demand" is the want satisfying power of a commodity backed by income. Thus, it implies:  A ‘desire’ to acquire a product/service  ‘Willingness’ to pay for the product/service  Ability to pay for the product/service The law of demand states that when the price of a good rises, the amount demanded falls, and when the price falls, the amount demanded rises (Henderson, The Concise Encyclopedia of Economics). A demand schedule is a table of the quantity demanded of a good at different price levels. Thus, given the price level, it is easy to determine the expected quantity demanded (Investopedia). Below is a hypothetical table showcasing the varied demand for coffee beans at different market prices. It shows a rise in demand with fall in price for coffee beans. Demand can also be 'inelastic'. By inelastic demand we mean that that demand remain constant irrespective of change in price (refer graph below). What is Supply? Economists describe supply as the relationship between t... ... middle of paper ... ... straight on to consumers. Consumers demand pollution free air, but they also need 'other goods' at marginal utility. Therefore, consumers fall indifferent. An indifference curve is a graph showing different types of goods between which a consumer is indifferent. That is, at each point on the curve, the consumer has no preference for one item over another (as is shown in the graph below). The pollution quotient remains constant world-wide too, though the government of that particular country is positively impacting the negative externality. So, it can be concluded that levying carbon tax does not change the amount of world-wide pollution, instead it adversely affects business or industrial opportunities in a country. And as per consumer behavior, this situation leads to the indifference of customers where they really have no preference for one over the other.

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