Examples of Supply and Demand

The process of interaction between supply and demand is the central element of the economies market, which are the norm in the world where almost all economies are capitalist. For example: the increase in the price of a fruit due to a drought.

The interaction refers to a process in which price levels they are determined by the coincidences in the price to exchange something, between a person who owns it and is willing to give it away, and another who does not have it but would provide some utility.

Offer

The bidding process comes from the verb offer and it refers to the set of mechanisms by which goods reach the market at a certain price. In some cases, it is the producer who sets a price and expects potential consumers access it or you must download it to get plaintiffs. In the largest economies, the producer delivers his product to other economic agents that have exclusively the function of offering it.

For the activity to be profitable, the producer must try to obtain at least as much money as he spent to produce the good, since it surely had costs: this implies that the suppliers are at the same time demanding other things.

Determinants of supply

It is common for economic supply models seek to find what are the determinants that make the appearance of more or less quantities in the market. The essence of the supply and demand model, however, is that these determinations are not objective but are due to an aggregation of the subjective preferences of the users.

However, there are some elements that make the determination of the supply level, following the general rule that the higher the supply (for the same demand), the lower the price, and when the supply is lower the price will rise.

Demand

The other side of the process by which products reach the market is the interaction by which they leave it, that is, the user acquisition. It is not necessarily about the acquisition for consumption, as there are goods that are bought to produce others or even that are bought to sell in the future.

The general process of the economy tends to assume that the bidders determine the price (as explained in the case of the offer) while the plaintiffs meet him and respond with their decisions. As a general rule, except in the case of special goods called giffen, it can be said that the demand has an inverse trajectory to the price: when it increases, the demand is lower.

Determinants of demand

In addition to the price, there are other factors that come together to determine the levels of demand:

Examples of supply and demand

Below is a list of supply and demand cases, with particular situations that exemplify the process:

1. The increase in the price of a fruit due to a drought.
2. Decreases in the price of out-of-fashion products.
3. The decrease in the demand for cars resulted from significant increases in the price of fuel.
4. Changes in the price of clothing for simple fashions.
5. The antitrust laws, seeking that the introduction of many companies increases the level offered.
6. Changes in the price of bonds, where the supply-demand interaction is instantaneous and minute by minute.
7. The fall in the quantity produced of certain goods when they are replaced by modern technologies.
8. Labor unrest, where job providers (employees) are always looking for a higher salary and applicants (owners) are looking to pay as little as possible.
9. The huge expenditures in advertising, in order to attract more demand.
10. Decreases in the price of out-of-season products.