Demand & Supply
DEMAND AND SUPPLY In the market economy, the interaction of the buyers and sellers determines how the market will work. Buyers demand and producers sell for a particular quantity of goods and services at a certain level of prices. To Adam Smith, widely cited as the father of Modern Economics and Capitalism, in a free market, consumers are free to choose varieties of commodities, while producers have freedom of choice the commodities for sale and its production. Market settles on the price that maximizes the benefit of the consumers and producers, resulting in “Happiness of Mankind”.
DEMAND Quantity demanded is defined as the number of a good or services that the buyer is able and willing to buy at a certain level of price. If a consumer has the ability to buy but it is not willing to buy or the other way around, demand is still considered as potential. An example of which is a “window shopper” who has the willingness to shop but has no money to spare. No transaction occurs for a potential demand. To convert potential demand to actual demand, numerous strategies suggest strategies like convincing, commercials, powerful slogans and salesmanship. In addition, in the advent of credit system, consumers need not have to hinder their willingness to buy because credit and loans are extended to consumers to facilitate the process of consumption. Demand Schedule is a table or matrix that shows the quantity of goods purchased at a certain level of prices. The quantity demanded values are rates of purchases at alternative prices but it does not reveal at what particular price will actually exist in the market.
The table only shows the quantity of stuffed animals this consumer is willing to buy to a corresponding price. The aggregate demand of a certain group of consumers is presented as the market demand schedule. Thus, demand tells us the purchasing behaviour of the buyer. The connection concerning price and quantity demanded for any merchandise can be
DEMAND Quantity demanded is defined as the number of a good or services that the buyer is able and willing to buy at a certain level of price. If a consumer has the ability to buy but it is not willing to buy or the other way around, demand is still considered as potential. An example of which is a “window shopper” who has the willingness to shop but has no money to spare. No transaction occurs for a potential demand. To convert potential demand to actual demand, numerous strategies suggest strategies like convincing, commercials, powerful slogans and salesmanship. In addition, in the advent of credit system, consumers need not have to hinder their willingness to buy because credit and loans are extended to consumers to facilitate the process of consumption. Demand Schedule is a table or matrix that shows the quantity of goods purchased at a certain level of prices. The quantity demanded values are rates of purchases at alternative prices but it does not reveal at what particular price will actually exist in the market.
The table only shows the quantity of stuffed animals this consumer is willing to buy to a corresponding price. The aggregate demand of a certain group of consumers is presented as the market demand schedule. Thus, demand tells us the purchasing behaviour of the buyer. The connection concerning price and quantity demanded for any merchandise can be
References: Besanko, D., & Braeutigam, R. Microeconomics 2nd Edition. New Jersey, USA: John Wiley & Sons, Inc., 2006. Pagoso,C. M., Dionio, R.P., & Villasis, G. A. Principles of Microeconomics. Manila, Philippine Rex Bookstore, Inc., 2008. Pindyck, R., & Daniel, R. Microeconomics. Pearson Education, Inc., 2008.