Every educated person should understand what the supply and demand in the market and how these concepts affect the price level.As is known, the manufacturers can not provide an unlimited amount of goods and services, as the potential buyers are not able to consume the entire volume.In order to streamline the market system, using indicators such as the offer.It represents the amount of all the products supplied to the market in a unit of time or for a certain period.
Analyzing that such a proposal should take into account that it reflects not only the actual presence of the products on the market, but the volume of production, which the supplier can deliver the first request.The current economic and political situation in the country allows entrepreneurs to make a decision about to whom and how much to produce.The manufacturer, in turn, determines the maximum volume of production, based on the analytical data.Specialists make appropriate conclusions on the basis of objective law, reflecting the dependence of the offers and prices.Indeed, between these indicators there is a connection, because any increase in the cost of goods leads to an increase in retained earnings, which gives reason to expand the business.
In order to understand what supply and demand, should also understand the interaction of these concepts.With increasing demand for the product, that is, when buyers are willing to buy more products, manufacturers are beginning to increase the volume of shipments.If you think of these concepts in the form of a graph in the same plane, we obtain two intersecting lines.At the point of intersection of an equilibrium price, that is, it reached a state in which a quantity of goods shipped, which can consume the target audience.Thus, demand creates supply, and vice versa.
Among the factors affecting the proposal, especially want to highlight the non-price.To those include the cost of raw materials for production, the extent of the tax burden and inflation expectations.For example, an increase in the cost of raw materials and constant prices for manufactured goods to the director have to reduce the volume of the finished product.Accordingly, in the graph the supply curve moves to the left.Contact dynamics is observed with a decrease in the cost of raw materials: the output is increased, and the curve shifts to the right.
Often, state authorities regulate the market supply system of taxation.If the government decides to support the development of an industry, the tax rate for these companies is reduced.Then the entrepreneur have more own funds, enabling it to increase its output.As no less effective lever can be noted various grants and subsidies, specifically designed for the development or expansion of the individual organizations.
In considering that such a proposal, it is necessary to study this concept in relation to other factors.
