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Supply and Demand Draft Version_Order_6_

Supply and Demand Draft Version_Order_6_ - Running Head...

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Running Head: ECONOMICS 1 Economics Name: Course: College: Tutor: Date:
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ECONOMICS 2 Economics is a field of study which seeks to establish reasons behind the imbalance portrayed by the consumers and markets even when all other factors are held constant. It seeks to explain how consumers attempt to use the scarce resources to meet their unlimited wants. In its pursuit therefore, some of the variables of its major concern include demand and supply. If to mention, demand refers to the willingness accompanied by the ability to buy while supply refers to the quantity that the market is capable to provide to its willing and capable customers. Demand and supply are guided by some principles for the enhancement of market operations. For instance, the guiding principle behind demand states that if all other factors are held constant, the higher the price the lower the quantity consumers are willing to buy. Therefore, when prices go up for any commodity, consumers will be less willing to purchase the product. On supply, the higher the price of a commodity, the more sellers are willing to supply to the market. These laws however are predetermined by other variables ranging from level of technology, costs of inputs and the incomes of consumers. Some of other determining factors include the availability and costs of other related products/substitutes (Hosseini, 2003). Equilibrium is the point where the quantity demanded of a commodity equals to the quantity supplied and this is a major concern in the market structures as it seeks to establish consumer satisfaction. To attain equilibrium, the variables initially mentioned are a major concern as costs of production go hand in hand with the price the market offers for various commodities. In the demand and supply presentation, the curves portray shifts and movements
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