Supply and Demand
 

Hi dear fellows,


[B][FONT=Times New Roman]Supply and Demand[/FONT][/B]

[FONT=Times New Roman][SIZE=3]Relationship between the quantity of a commodity that producers have available for sale and the quantity that consumers are willing and able to buy.[/SIZE][/FONT]

[FONT=Times New Roman][SIZE=3]Demand depends on the [/SIZE][/FONT][URL="bword://!!09HMK27M2P,price/"][FONT=Times New Roman][SIZE=3][COLOR=#0000ff]price[/COLOR][/SIZE][/FONT][/URL][FONT=Times New Roman][SIZE=3] of the commodity, the prices of related commodities, and consumers' incomes and tastes. Supply depends not only on the price obtainable for the commodity but also on the prices of similar products, the techniques of production, and the availability and costs of inputs. The function of the [/SIZE][/FONT][URL="bword://!!09HMK27M2P,market/"][FONT=Times New Roman][SIZE=3][COLOR=#0000ff]market[/COLOR][/SIZE][/FONT][/URL][FONT=Times New Roman][SIZE=3] is to equalize demand and supply through the price mechanism. If buyers want to purchase more of a commodity than is available on the market, they will tend to bid the price up. If more of a commodity is available than buyers care to purchase, suppliers will bid prices down. Thus, there is a tendency toward an equilibrium price at which the quantity demanded equals the quantity supplied. The measure of the responsiveness of supply and demand to changes in price is their elasticity. [/SIZE][/FONT]
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:D