Within the market economy there are concepts that everyone should know, the law of supply and demand is one of the most important, in fact, it is consider one of its essential principles.
As its name indicates, it corresponds to the relationship between the quantity offer of a product, good or service and its demand .
To apply the principle of thet is necessary to consider the sales price, since it corresponds to the factor that determines both the volume of units that should be manufactur and the quantity that buyers are willing to buy.
rices of products, services or goods depend on the law of supply and demand. Within a balanc market, this financial principle determines how much consumers or customers are willing to pay.
In this way, stability can be skew by circumstances, giving rise to two possible scenarios: an upward trend in price when demand exces supply , and a downward trend if supply increases over demand
Considering that the law is bas on the relationship between both factors, the point of intersection between the supply and demand curves is what establishes the equilibrium price.
To do this, it is essential that suppliers are willing to manufacture the same volume of products, goods or services that demanders want to buy without changing the price.
A universal system
This principle is evident in every financial system and market on a global scale. At the business level, it is an indispensable parameter when determining prices and calculating potential profits.
It is also a key tool in controlling the market and its impact on the economy.
In certain economic models, consumers use the law to influence prices, since when fac with a substantial increase, they stop purchasing products and services, forcing manufacturers to rethink their offering.
It is clear that demand determines the decrease or increase in supply , and this in turn affects the purchasing power of consumers or users, since the price is what determines their possibilities to buy.
Given this, we can assume that market stabilit iran telegram data is proportional to price equilibrium.
The point of equilibrium
The relationship between these two variables is the basis what kind of people am I looking for on my team? for the functioning of any market. While the absence of demand slows down production , the lack of supply limits the possibilities of purchasing.
In this sense, the equilibrium point or market equilibrium can only exist when the quantity demand is equivalent to the volume of supply at a certain price, something quite complicat to achieve considering that ma cz lists rket regulation is handl independently.
Applying the law, equilibrium is usually a consequence of excess, either of supply or demand.
When the equilibrium price is below the supply price, the volume exces the quantity demand, therefore, sales depend on the supplier’s decision to lower prices.
Conversely, the inability of suppliers to meet the volume of demand increases prices. This measure allows the number of demanders to decrease and thus return to the equilibrium point.
In short, according to the law of supply and demand, an increase in price leads to an increase in supply and a decrease in demand. On the contrary, a downward trend increases demand and ruces supply.