Market, price, supply, demand, market balance.

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Market, Price, Supply, Demand, Market Balance.
Price, Supply and demand are elements of every market. a) Price These are two kinds of prices: Nominal (absolutely) price – this is the price which wesee on every product. For example: bread costs 1 euro, mineral water costs 1 euro, trousers cost 20 euros, ect. Relative price – this is the price, which is more important. Thank this kind of price wecan compare prices of other things, taking in to consideration our budget.

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b) Demand is concerned with consumers’ behavior. It shows, how much/many things we buy, when the price increases ordecreases. When the price is low we usually by more goods and it the other way – when the price is high we buy less goods.

demand 30 25 20 15 10 5 0 1 2 3 4 5 6 7 8 9 10 Qantity

Definition ofdemand is concerned only with price and quantity. There are many non-price factors which are concerned with demand. This factors provoke, that whole ….. moves to the right or to the left. These factorsare: a) b) c) d) e) Prices of substitutes and complementary goods; Consumers budget; Demography; Future prices changing; Snobbism effect;

Price

f) Fashion, weather seasons, preferentions…Supply is concerned with producers’ behavior. When the price is low they usually offer less goods and it the other way – when the price is high they offer more goods.

supply 40 30

Price

20 10 0 12 3 4 5 Quantity 6 7 8 9

Definition of supply is concerned only with price and quantity. There are many non-price factors which are concerned with supply. This factors provoke, that whole ….. movesto the right or to the left. These factors are: g) h) i) j) k) l) Prices of productivity factors; Development of technology; Number of producers; Future prices changing; Cataclysm, crisis… Thegovernment activity (financial help or restrictions)

The market balance

Market balance 40 30

Price

20 10 0 1 2 3 4 5 Quantity 6 7 8 9

The cross-point of demand and supply is called market...
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