tag:blogger.com,1999:blog-10468793256233242472024-03-12T16:38:16.113-07:00Supply and DemandProdcons Grouphttp://www.blogger.com/profile/03483621255030187693noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-1046879325623324247.post-60391270809823209112009-06-03T05:21:00.000-07:002009-11-19T23:57:01.229-08:00Supply and Demand<strong><span style="color:#993300;"></span></strong><br /><strong><span style="color:#993300;">Supply and Demand: <em>Basics of Economics</em></span></strong><br /><br /><ul><li><span style="color:#000000;">Concepts and practices related to supply and demand and the laws of supply and demand are the basics of economics.</span></li><li>Market economy is largely dependent on supply and demand.</li><li>Price, supply and demand are interconnected with each other.</li><li>Laws of supply and demand have a bearing on allocation of resources.</li></ul><p><strong><span style="color:#993300;">Demand</span></strong></p><ul><li>Quantity of goods and services desired by the buyers is called demand.</li><li>Buyers decide the quantity to buy based on the price.</li><li>The quantity demanded in relation to the price is called demand relationship.</li></ul><p><strong><span style="color:#993300;">Supply</span></strong></p><ul><li><span style="color:#000000;">Quantity of goods and services offered in the market in called supply.</span></li><li>Suppliers decide the quantity to supply based on the price they can get in the market.</li><li>The quantity supplied in relation to the price is called supply relationship.</li></ul><p><strong><span style="color:#993300;">Law of Supply</span></strong></p><ul><li>At higher prices suppliers are willing to offer more products and services for sale than at lower prices.</li><li>Therefore, the supply increases as prices increase and decreases as prices decrease.</li><li>Producers will try to increase production as a way of increasing revenues and profits.</li></ul><p><strong><span style="color:#993300;">Law of Demand</span></strong></p><ul><li>Buyers will buy more of a product or service at a lower price than at a higher price, if other things remain constant.</li><li>At a lower price, more buyers can afford to buy more goods and services and more frequently than they will at a higher price.</li><li>At lower prices, buyers tend to buy some goods and services as a substitute for other goods and services that are more expensive.</li></ul><p><strong><span style="color:#993300;">Equilibrium and Disequilibrium</span></strong></p><ul><li><span style="color:#000000;">When the supply equals demand or when demand equals supply, it is said that the economy is in equilibrium.</span></li><li>It is an ideal situation but may not remain for a longer period in actual practice.</li><li>In actual real life situations, the prices of goods and services constantly change in relation to fluctuations in demand and supply. </li><li>Under the equilibrium situation, suppliers sell all the goods and serviced produced/offered by them at the given price and buyers get all the goods and services desired by them at that given price.</li><li>If the price is set too high (above equilibrium point price), excess supply will take place within the economy since the suppliers will produce/offer more goods and services with hope to sell to increase profits but the buyers will find the products/services less attractive and buy less because the price is too high. Unless the price drops down approximately to its equilibrium point price, the demand will not pick up.</li><li>If the price is set too low (below equilibrium point price), excess demand will take place within the economy since the buyers will find it attractive to buy more goods/services at lower price but the suppliers may not produce/offer enough goods/services because of lower price (and lower profit). However, since the demand is now more than the supply, the buyers have to compete with each other to buy the goods/services at this lower price, the increased demand will push the price up, motivating suppliers to want to supply more. That will bring the price closer to its equilibrium. </li></ul><strong><span style="color:#993300;">Movement</span></strong><br /><br /><ul><li><span style="color:#993300;"><span style="color:#000000;">Movement is said to have taken place when a change in demand is caused <em>only</em> by a change in price and vice <span class="blsp-spelling-error" id="SPELLING_ERROR_0">versa</span>. </span></span></li><li><span style="color:#993300;"><span style="color:#000000;">Also, movement is said to have taken place when a change in supply is caused <em>only </em>by a change in price, and vice <span class="blsp-spelling-error" id="SPELLING_ERROR_1">versa</span>. </span></span></li></ul><p><span style="color:#993300;"><strong><span style="color:#993300;">Shift</span></strong></span></p><ul><li><span style="color:#993300;"><span style="color:#000000;">Shift is said to have taken place when demand or supply changes even though price remains the same. </span></span></li><li><span style="color:#993300;"><span style="color:#000000;">Shift in the demand or supply imply that the original demand or <span class="blsp-spelling-error" id="SPELLING_ERROR_2">suply</span> has been affected by a factor other than price.</span> <span style="color:#000000;"><span class="blsp-spelling-error" id="SPELLING_ERROR_3">Pri</span></span><span style="color:#000000;"><span class="blsp-spelling-error" id="SPELLING_ERROR_4">ce</span> remains the same though either demand or supply has changed. Otherwise as we know, with change in demand or supply, the price changes and vice <span class="blsp-spelling-error" id="SPELLING_ERROR_5">versa</span> (see explanation of term "movement" given earlier).</span></li></ul></span><strong><span style="color:#993300;">For More Guidance, Assistance, Training and Consultation<br /><br /></span></strong><strong><span style="color:#993300;"></span></strong><strong><span style="color:#993300;"></span></strong><p><span style="color:#000000;">Contact: <a href="mailto:prodcons@prodcons.com">prodcons@prodcons.com</a></span></p><p><span style="color:#000000;">Also refer: <em>(<span class="blsp-spelling-error" id="SPELLING_ERROR_6">Prodcons</span> Group) </em><a href="http://prodcons-group.blogspot.com/"><em>http://prodcons-group.blogspot.com/</em></a><em>, (Training Programs by <span class="blsp-spelling-error" id="SPELLING_ERROR_7">Prodcons</span> Group) </em><a 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href="http://quality-circles-history.blogspot.com/">http://quality-circles-history.blogspot.com/</a><br />(Quality Circles) <a href="http://quality-circles.blogspot.com/">http://quality-circles.blogspot.com/</a><br />(Quality Function Deployment- QFD and House of Quality) <a href="http://quality-function-deployment.blogspot.com/">http://quality-function-deployment.blogspot.com/</a><br />(Quality Gurus) <a href="http://quality-gurus.blogspot.com/">http://quality-gurus.blogspot.com/</a><br />(Recession) <a href="http://knol.google.com/k/shyam-bhatawdekar/recession/6txz9nck6g3/7">http://knol.google.com/k/shyam-bhatawdekar/recession/6txz9nck6g3/7#</a><br />(Recession Management) <a href="http://recession-management.blogspot.com/">http://recession-management.blogspot.com/</a><br />(Recruitment and Selection) <a href="http://recruitment-selection.blogspot.com/">http://recruitment-selection.blogspot.com/</a><br />(Research Methodology) <a href="http://research-work-methodology.blogspot.com/">http://research-work-methodology.blogspot.com/</a><br />(Safety and Health Management) <a href="http://safety-health-management.blogspot.com/">http://safety-health-management.blogspot.com/</a><br />(Sales/Selling Process) <a href="http://selling-process.blogspot.com/">http://selling-process.blogspot.com/</a><br />(Sales Promotion) <a href="http://sales-promotion.blogspot.com/">http://sales-promotion.blogspot.com/</a><br />(Self development) <a href="http://managing-self.blogspot.com/">http://managing-self.blogspot.com/</a><br />(Self-confidence) <a href="http://self-confidence-improvement.blogspot.com/">http://self-confidence-improvement.blogspot.com/</a><br />(Six Sigma) <a href="http://six-sigma-system.blogspot.com/">http://six-sigma-system.blogspot.com/</a><br />(Six Thinking Hats) <a href="http://six-thinking-hats.blogspot.com/">http://six-thinking-hats.blogspot.com/</a><br />(Soft Skills) <a href="http://soft-skills-competencies.blogspot.com/">http://soft-skills-competencies.blogspot.com/</a><br />(Spiritual Quotient/Intelligence) <a href="http://spiritual-quotient.blogspot.com/">http://spiritual-quotient.blogspot.com/</a><br />(Strategic Management) <a href="http://strategic-managing.blogspot.com/">http://strategic-managing.blogspot.com/</a><br />(Stress Management) <a href="http://management-of-stress.blogspot.com/">http://management-of-stress.blogspot.com/</a><br />(Stress Management) <a href="http://managing-stress-strain.blogspot.com/">http://managing-stress-strain.blogspot.com/</a><br />(Success) <a href="http://success-achievement.blogspot.com/">http://success-achievement.blogspot.com/</a><br />(Supply Chain Management) <a href="http://manage-supply-chain.blogspot.com/">http://manage-supply-chain.blogspot.com/</a><br />(Supply and Demand) <a href="http://supply-demand-laws.blogspot.com/">http://supply-demand-laws.blogspot.com/</a><br />(Talent Management) <a href="http://managing-talent.blogspot.com/">http://managing-talent.blogspot.com/</a><br />(Team Building) <a href="http://team-building-working.blogspot.com/">http://team-building-working.blogspot.com/</a><br />(Telephone Etiquette) <a href="http://telephone-etiquette.blogspot.com/">http://telephone-etiquette.blogspot.com/</a><br />(Three Sixty Degrees Appraisal System) <a href="http://three-sixty-degrees-feedback.blogspot.com/">http://three-sixty-degrees-feedback.blogspot.com/</a><br />(Time Management) <a href="http://time-life-management.blogspot.com/">http://time-life-management.blogspot.com/</a><br />(Total Productive Maintenance- TPM) <a href="http://total-productive-maintenance.blogspot.com/">http://total-productive-maintenance.blogspot.com/</a><br />(Total Quality Management- TQM) <a href="http://total-quality-concept.blogspot.com/">http://total-quality-concept.blogspot.com/</a><br />(Training and Development) <a href="http://training-function.blogspot.com/">http://training-function.blogspot.com/</a><br />(Trainers’ Qualities) <a href="http://trainers-qualities.blogspot.com/">http://trainers-qualities.blogspot.com/</a><br />(Transaction Analysis- TA) <a href="http://transaction-analysis.blogspot.com/">http://transaction-analysis.blogspot.com/</a><br />(TRIZ- Inventive Problem Solving) <a href="http://triz-problem-solving.blogspot.com/">http://triz-problem-solving.blogspot.com/</a><br />(Value Engineering/Analysis) <a href="http://value-engineering-analysis.blogspot.com/">http://value-engineering-analysis.blogspot.com/</a><br />(Winners and Losers) <a href="http://winners-losers.blogspot.com/">http://winners-losers.blogspot.com/</a><br />(World Class Manufacturing) <a href="http://world-class-manufacturing.blogspot.com/">http://world-class-manufacturing.blogspot.com/</a><br />(Written Communication) <a href="http://written-communication.blogspot.com/">http://written-communication.blogspot.com/</a><br />(Zero Based Budgeting) <a href="http://zero-based-budgeting.blogspot.com/">http://zero-based-budgeting.blogspot.com/</a><br /><br /><strong><span style="color:#006600;">Counseling: General and Psychological<br /></span></strong>(Anger Management) <a href="http://controlling-anger.blogspot.com/">http://controlling-anger.blogspot.com/</a><br />(Children’s Behavior Problems) <a href="http://child-behavior-problems.blogspot.com/">http://child-behavior-problems.blogspot.com/</a><br />(Cholesterol Control) <a href="http://controlling-cholesterol.blogspot.com/">http://controlling-cholesterol.blogspot.com/</a><br />(Counseling: Psychological) <a href="http://counselingfamily.blogspot.com/">http://counselingfamily.blogspot.com/</a><br />(Counseling: Psychological) <a href="http://counseling-family.blogspot.com/">http://counseling-family.blogspot.com/</a><br />(Cross Cultural Etiquette) <a href="http://cross-cultural-etiquette.blogspot.com/">http://cross-cultural-etiquette.blogspot.com/</a><br />(Emotions) <a href="http://emotion-feeling.blogspot.com/">http://emotion-feeling.blogspot.com/</a><br />(Executive Etiquette and Manners) <a href="http://executive-manners.blogspot.com/">http://executive-manners.blogspot.com/</a><br />(Exercises) <a href="http://exercises-plan.blogspot.com/">http://exercises-plan.blogspot.com/</a><br />(Family Counseling) <a href="http://family-harmony.blogspot.com/">http://family-harmony.blogspot.com/</a><br />(Health: Homeopathy) <a href="http://homeopathy-medicines.blogspot.com/">http://homeopathy-medicines.blogspot.com/</a><br />(LifeManagement: Competencies) <a href="http://knol.google.com/k/shyam-bhatawdekar/competency-matrix/6txz9nck6g3/4">http://knol.google.com/k/shyam-bhatawdekar/competency-matrix/6txz9nck6g3/4#</a><br />(Life Management: Effectiveness Management: HSoftware) <a href="http://knol.google.com/k/shyam-bhatawdekar/management-in-life-profession-family/6txz9nck6g3/3">http://knol.google.com/k/shyam-bhatawdekar/management-in-life-profession-family/6txz9nck6g3/3#</a><br />(Life management: I Am Liberated) <a href="http://knol.google.com/k/shyam-bhatawdekar/i-am-liberated/6txz9nck6g3/6#view">http://knol.google.com/k/shyam-bhatawdekar/i-am-liberated/6txz9nck6g3/6#view</a><br />(Marriage Counseling) <a href="http://marriage-counsel.blogspot.com/">http://marriage-counsel.blogspot.com/</a><br />(Ownership on Job) <a href="http://job-ownership.blogspot.com/">http://job-ownership.blogspot.com/</a><br />(Parental Responsibilities) <a href="http://parental-responsibilities.blogspot.com/">http://parental-responsibilities.blogspot.com/</a><br />(Personality) <a href="http://human-personality.blogspot.com/">http://human-personality.blogspot.com/</a><br />(Qualities of Spouse) <a href="http://spouse-qualities.blogspot.com/">http://spouse-qualities.blogspot.com/</a><br />(Quit Smoking) <a href="http://quit-smoking-plan.blogspot.com/">http://quit-smoking-plan.blogspot.com/</a><br />(Self Development) <a href="http://managing-self.blogspot.com/">http://managing-self.blogspot.com/</a><br />(Self-confidence) <a href="http://self-confidence-improvement.blogspot.com/">http://self-confidence-improvement.blogspot.com/</a><br />(Stress Management) <a href="http://managing-stress-strain.blogspot.com/">http://managing-stress-strain.blogspot.com/</a><br />(Stress Management) <a href="http://management-of-stress.blogspot.com/">http://management-of-stress.blogspot.com/</a><br />(Swine Flu and Its Prevention) <a href="http://swine-flu-precaution.blogspot.com/">http://swine-flu-precaution.blogspot.com/</a><br />(Telephone Etiquette) <a href="http://telephone-etiquette.blogspot.com/">http://telephone-etiquette.blogspot.com/</a><br />(Walking) <a href="http://walking-plan.blogspot.com/">http://walking-plan.blogspot.com/</a><br />(Winners and Losers) <a href="http://winners-losers.blogspot.com/">http://winners-losers.blogspot.com/</a><br /><br /><strong><span style="color:#006600;">About All the Products<br /></span></strong>(<strong><span style="color:#ff0000;">Home Page for All Products</span></strong>) <a href="http://products-all.blogspot.com/">http://products-all.blogspot.com/</a><br />(Cars) <a href="http://cars-products.blogspot.com/">http://cars-products.blogspot.com/</a><br />(Chocolates) <a href="http://chocolates-products.blogspot.com/">http://chocolates-products.blogspot.com/</a><br />(Flowers) <a href="http://flowers-products.blogspot.com/">http://flowers-products.blogspot.com/</a><br />(Greeting Cards) <a href="http://greeting-cards-products.blogspot.com/">http://greeting-cards-products.blogspot.com/</a><br />(Mobile Phones) <a href="http://mobilephones-products.blogspot.com/">http://mobilephones-products.blogspot.com/</a><br /><br /><strong><span style="color:#006600;">Home Tips<br /></span></strong>(<strong><span style="color:#ff0000;">Home Page for All Home Tips</span></strong>) <a href="http://home-tips-tricks.blogspot.com/">http://home-tips-tricks.blogspot.com/</a><br />(Entertainment: Movies) <a href="http://popular-movies.blogspot.com/">http://popular-movies.blogspot.com/</a><br />(Oscar Award Movies) <a href="http://oscar-award-movies.blogspot.com/">http://oscar-award-movies.blogspot.com/</a><br />(Entertainment- Hindi Movies of Your Choice) <a href="http://hindi-movies-choice.blogspot.com/">http://hindi-movies-choice.blogspot.com/</a><br />(Health: Homeopathy) <a href="http://homeopathy-medicines.blogspot.com/">http://homeopathy-medicines.blogspot.com/</a><br />(Housekeeping at Home) <a href="http://5s-housekeeping-home.blogspot.com/">http://5s-housekeeping-home.blogspot.com/</a><br />(How to Save Money) <a href="http://save-money-ideas.blogspot.com/">http://save-money-ideas.blogspot.com/</a> or <a href="http://knol.google.com/k/shyam-bhatawdekar/how-to-save-money/6txz9nck6g3/11">http://knol.google.com/k/shyam-bhatawdekar/how-to-save-money/6txz9nck6g3/11#</a><br />(Recipes: Easy to Cook) <a href="http://easytocook-recipes.blogspot.com/">http://easytocook-recipes.blogspot.com/</a><br />(Recipes: Exotic) <a href="http://tastetherecipes.blogspot.com/">http://tastetherecipes.blogspot.com/</a><br />(Stories for Children) <a href="http://stories-children.blogspot.com/">http://stories-children.blogspot.com/</a><br />(Travel and Sightseeing- India) <a href="http://india-tours-sightseeing.blogspot.com/">http://india-tours-sightseeing.blogspot.com/</a><br />(Travel and Sightseeing- World) <a href="http://sightseeing-guide.blogspot.com/">http://sightseeing-guide.blogspot.com/</a><br /><br /><strong><span style="color:#006600;">General Knowledge and Out of Box Ideas<br /></span></strong>(General Knowledge- GK) <a href="http://general-knowledge-gk.blogspot.com/">http://general-knowledge-gk.blogspot.com/</a><br />(General Knowledge- Top 5/Top 10) <a href="http://top-five-everything.blogspot.com/">http://top-five-everything.blogspot.com/</a><br />(Out of Box Ideas) <a href="http://wow-idea.blogspot.com/">http://wow-idea.blogspot.com/</a><br />(Shyam Bhatawdekar’s Knols) <a href="http://knol.google.com/k/shyam-bhatawdekar/shyam-bhatawdekar/6txz9nck6g3/1#">http://knol.google.com/k/shyam-bhatawdekar/shyam-bhatawdekar/6txz9nck6g3/1#</a>Prodcons Grouphttp://www.blogger.com/profile/03483621255030187693noreply@blogger.com0