As demand increases price decreases from consumer side and from the supplier side demand decreases price increases. Inverse relationship between the price of a goods and quantity buyer are willing to purchase in defined time period. But there is a exception in the inferior goods i.e price increases demand also increases for example gold, air conditioner etc. As i mentioned above from the supplier side that with increase in price demand increases from supplier side because supplier wants to earn more and they increases the price.
Non price determinants supply are as follows
Cost of production
Profitability of alternative
Profitability of goods in joint
Nature of random shock
Non price determinants of demand
Taste buying cloth
Number and price of suitable goods
Number and price of suitable goods
Distribution of income
Expectation
All the above are the determinants of demand and supply which determine the buyer to buy a commodity and seller to sell the commodity.
Economics when applied to real life sounds beautiful. this blog is for those students who are discovering the different facets of economics applications and want to share their discoveries.
Friday, July 27, 2018
Demand
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