Supply! The opposite of demand. We learned that a supply curve will always slope upwards, and the 6 factors of supply, among other things. So think of it when we go out to buy something, let's say Starbucks as an example. You go out to get a large cup of coffee or whatever you call it, and it costs $6.00 for a single cup. A person would say the supply for Starbucks is high, because it is popular, and expensive. The quantity demanded is also high, as I see so many people walking around holding Starbucks. The price between supply and demand balanced around 6$. Now for something which has a less price, because the quantity supplied is lower would be McDonald's, and their McCafe or something. Due to the fact that consumers are out for their own self-interest, suppliers have the ability to manipulate prices so consumers can come buy their goods and services. It depends on the producer. Demand and supply depend also on one another, for the self-interest of the community.
I like how you pointed out the dependency of demand and supply on each other and how this means that consumers and producers are dependent on each other to reach a certain price. I agree that this means that either side can manipulate the other to some extent. Producers can decide to sell essential products at extreme prices and consumers can choose not to buy certain items unless they are unreasonably cheap prices.
ReplyDelete