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| Source - SCB |
A lot of debate was going on between the British as they noticed and embraced this but later on, they published the law of demand and supply in economics in a very general way. British economics have discussed innovation in technological things and an enormous amount of labour as well as heavy production are being discussed.
Supply is the fundamental concept in economics. It is a little bit similar to the theory of demand. It somehow explains to the consumers how much the product is available in the market. It even depicts the alternate products as well. The supply by the producers will rise if the price increases as all firms look to maximize the revenues.
Economists often talk about demand curves as well as supply curves. The demand curve depicts at different prices how much a consumer will buy. On the other hand, the supply curve depicts how many goods a producer can produce at different prices. So, making it simpler the demand curve looks from the consumers' perspective and the supply curve looks from a producer's point of view. Supply and demand are the most important concepts in economics as they determine the price of the commodity which is known as the equilibrium point in economics.
Supply is the fundamental concept in economics. It is a little bit similar to the theory of demand. It somehow explains to the consumers how much the product is available in the market. It even depicts the alternate products as well. The supply by the producers will rise if the price increases as all firms look to maximize the revenues.
Economists often talk about demand curves as well as supply curves. The demand curve depicts at different prices how much a consumer will buy. On the other hand, the supply curve depicts how many goods a producer can produce at different prices. So, making it simpler the demand curve looks from the consumers' perspective and the supply curve looks from a producer's point of view. Supply and demand are the most important concepts in economics as they determine the price of the commodity which is known as the equilibrium point in economics.
Supply means how much a producer is willing to sell the commodity at a given price and at that time. Supply mostly refers to goods, services, or labor.
Actual patterns may vary as there are different products. Keeping all other factors constant in demand the producer will also sell the quantity demanded.
Law of supply
The relationship between price and quantity is positive. So the law of supply states that as the price goes up the producer will sell more commodities. The other factors also affect the prices.
Factors that affect the price
Number of sellers in the market
The free exit and entry of the sellers affect the price of the product. The competition is the major factor here that affects the production as well. Since the marketplace is the major factor here that determines the price.
Expected future price
Actual patterns may vary as there are different products. Keeping all other factors constant in demand the producer will also sell the quantity demanded.
Law of supply
The relationship between price and quantity is positive. So the law of supply states that as the price goes up the producer will sell more commodities. The other factors also affect the prices.
Factors that affect the price
Number of sellers in the market
The free exit and entry of the sellers affect the price of the product. The competition is the major factor here that affects the production as well. Since the marketplace is the major factor here that determines the price.
Expected future price
The price is the major factor in supply. So if a consumer assumes that the price will fall then the consumer will try to purchase today. The perfect example of this is that the oil prices are increasing day by day so the producers will try to see it in the future.
Government policies
certain policies that affect the prices in the market the government tries to maintain the equilibrium point. The producers try to maximize the revenues and the government policies think from a welfare point of view. The government tries to maintain the equality among the people. As per economists equality can't be achieved but government tries to bring towards that.
Technological advancements
Innovation in science is happening day by day, which affects the production of goods and services. Certain technologies produce the maximum number of commodities in a factory, which affects the demand in the marketplace. As it is a long-term investment for a company that will reduce the cost at the same time it will increase production.
Government policies
certain policies that affect the prices in the market the government tries to maintain the equilibrium point. The producers try to maximize the revenues and the government policies think from a welfare point of view. The government tries to maintain the equality among the people. As per economists equality can't be achieved but government tries to bring towards that.
Technological advancements
Innovation in science is happening day by day, which affects the production of goods and services. Certain technologies produce the maximum number of commodities in a factory, which affects the demand in the marketplace. As it is a long-term investment for a company that will reduce the cost at the same time it will increase production.
An example of this is that Ahmedabad is known for cotton textile works, Arvind mill which came into the market with his technological advancements in the factory which then reduced the cost as well as increased the production, on the other hand, the earlier industries which were working on less technology more on laborers this then lead them in shutting of the factories.
Written by - Sakshi Alimchandani
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