The Theory of Demand and supply

The Theory Of Demand:

In economics, the term request indicates the amount of goods and services to be purchased by consumers at the time period and specific circumstances.

Market demand is the sum of the individual demand. Therefore, in order to understand the market demand must first understand the nature of the individual's request.

On the individual level, the demand is determined by two factors, namely:

1. Value of obtaining and using goods and services.


2. The ability to obtain goods and services.

Both of these factors is a prerequisite for effective individual requests. A passion without supported buying power (purchasing power) is merely a wish and not a request.Schedule request (demand schedule) a table showing the relationship between the price of the goods quantity requested.

Demand curves shows how changes in the quantity of goods being asked when the price changes. Because of the lower price increase the quantity demanded, then the demand curves have a negative slope.

Demand curves can be defined as follows: a graph that contains the relationship between the price of an item with quantity demanded.

Factors that affect the request are as follows:

The price of the item.

The price of an item affecting the amount of the requested item (purchased). The relationship between price and demand for goods that are inversely proportional. The cheaper the price is then the number of items requested will be more and more.

The prices of Substitutes.

Other goods are substitutes or substitute for the type or purpose is the same. So if there is a rise in the price of goods substitution then resulted in a rise in demand for goods.

Revenue

The revenue When someone is on the rise, means that people have a greater ability to buy goods, which ultimately led to demand for goods be increased.

Price Expectations in the future.

When all the public assume that in the future will come to pass price increases on an item, then the demand for such goods would further increase.

The number of consumers.

If the amount of the consumer or purchaser increase, then more and more demand for such goods.

Taste (trend).

When an item becomes a fashion or trend in society, then the demand for such goods is increasing rapidly.

The theory of supply (Supply):

bidding Law assume that by assuming other things constant, the quantity of goods being offered is increased when the price of such goods is on the rise.

The relationship between the price of the product with the quantity supplied can be seen in the schedule of supply (supply schedule). Offer Curve shows the change in the quantity of goods that are offered when the price changes. Because higher prices increase the quantity supplied, then curve upward slope have deals or positive.

Offer Curve is a curve that depicts the relationship among prices of goods with the quantity supplied.

As for the factors that affect the supply of which are:

• The price of the item. The relationship between the price and supply of the goods it was proportional.
  The cheaper the price is then the number of items offered will be the less and the more expensive price, then the number of items being offered more and more.


• Prices of other goods. The more expensive the price of substitutes then the less merchandise deals.


• The prices of factors of production. When the price of factors of production-increasing it will cause production costs to be expensive. When production costs and more expensive, then the manufacturer reduced its ability to produce.


• Price Expectations in the future. When there is a presumption that in the future will occur at a price increase of goods then will offer such goods would further decrease.


• Number of the manufacturer. If the number of manufacturers grew the more deals.


• With increasing technology, means the costs to produce becomes lower, thus the number of goods that can be produced are becoming more numerous.