Supply and demand - the most important concepts that form the basis of any economic system.Interdependence of these two factors apart tracks economic law.Another important concept directly related to these factors is the price.
demand reflects the ability and willingness of potential buyers to purchase a particular product for a certain number of funds in a strictly defined range of price and quantity.The volume of demand can vary and depends on many factors influencing it.These include cash and income level of the consumer, and market size, and seasonality, inflation, the availability of other substitute goods and others.
proposal, in turn, reflects the ability and willingness of potential vendors to implement certain products in a particular quantity volume at specific prices for a strictly limited time.The volume of supply as well as demand varies and depends on the capacity of production (involved capacities, technologies used, the availability of material and human resources, tax, etc.).
Moreover, supply and demand on the market should ideally be balanced.There will be no shortage of goods or overproduction.Bid is formed by the law, according to which its value increases with the price value.Demand is formed under the law, according to which its value decreases with increasing the cost price.
Accordingly, laws of supply and demand interact with each other in real life.An example of them is the operating system of a modern market economy of the Russian Federation, where the pricing is formed at the intersection of the curve interaction of supply and demand elasticities.It is no secret that the market economy of any country is subject to fluctuations, and the development of the value of the equilibrium of supply and demand are far from each other.The modern market is that the scale is unbalanced, when supply exceeds demand, or demand exceeds supply.In the first case it may be due to overproduction of consumer goods and services, an increase in their prices or the low purchasing capabilities.In the second embodiment, it can also be associated with low-income and high prices.The greatest impact for the development of any economic system creates an equilibrium price.This price is formed under the condition of free competition and creates the perfect balance between the volume of demand and supply, providing the greatest value of the cost-effectiveness of the progressive development of production, goods and services market as a whole.Therefore, government is trying to influence its decision on the pricing of goods, forced setting threshold limits, thereby regulating supply and demand.
Balance of the domestic market and its solvency plays an important role in the development of the production process, since the market is a key area where there is an exchange and distribution of wealth (exchange of goods, services).The labor market, the market of means of production, the capital market in the broad sense affect the structure and volume of produced goods, the level of income and solvency of the population, thereby forming a supply and demand.The state, through targeted integrated program helps manufacturers develop not only through the provision of subsidies to production, but has a direct impact on the formation of the volume of goods and services, thereby regulating supply and demand.By the methods of state regulation are different measures.It - preferential preferences, subsidies, customs policy, aimed at protecting the domestic market, as well as measures to promote the comprehensive development of exports of goods and services, etc.It is easy to note here that the role of government in shaping and developing a clear balanced economic system is quite significant and very important.
