Demand and supply

Spoločenské vedy » Ekonómia

Autor: 25258
Typ práce: Referát
Dátum: 06.03.2022
Jazyk: Angličtina
Rozsah: 726 slov
Počet zobrazení: 656
Tlačení: 66
Uložení: 75

Demand, elasticity of demand, supply

Characteristics of demand

Demand is a rate which shows how many buyers are able to buy products and services . The main factors of demand are a price and amount. These buyers and sellers have a meeting in the market of products and services.

Characteristics of market

The market is a place where buyers and sellers meet. Buyers and sellers want agree a price. Buyers and sellers have to make an agreement.

Function of demand is characterised with two quantities. These quantities are amount and price. Demand curve has got fall character. This phenomenon is called the law of declining demand.

The law of declining demand  

Increased price is characterised with decreasing of shopping. Decreased price is characterised with increasing of shopping.

Factors of demand

  1. Price of products

Demand´s factor means the law of declining demand.

  1. Income of consumers

Consumers with low income purchase an essential products.

  1. Availability of products
  2. Demographical structure of population

Factors of demographical structure of population are age, sex and education.

Types of demand

  1. Aggregate demand

Aggregate demand is a total amount of products and services which buyers are able to buy. The main factor of aggregate demand is a price.

  1. Individual demand

Individual demand is a demand of one type of products and services from one consumer.

  1. Partial demand

Partial demand is a demand of one type of products and services from many consumers.

Elasticity of demand

Very important rate of demand is elasticity of demand.

Elasticity of demand is a rate which shows a behaviour of consumer when the price changes.

Types of elasticity of demand

  1. Elasticity demand

1 percent change of price means increasing/ decreasing of demand for more than 1 percent.

Example

Original price of bread was 1 EUR. The price of bread decreased for more than 1 percent. The price of bread is 0,95 EUR.

Original number of customers was 1000. This number increased for more than 1 percent. The number of costumers is 1015.

  1. Inelastic demand

1 percent change of price means increasing/ decreasing of demand for less than 1 percent.

Example

Original price of bread was 1 EUR. The price of bread decreased for less than 1 percent. The price is 0,995 EUR.

Original number of customers was 1000. This number increased for less than 1 percent. The number of costumers is 1008.

  1. Unitary elasticity demand

1 percent change of price means increasing/ decreasing of demand by 1 percent.

Example

Original price of bread was 1 EUR. The price of bread decreased by 1 percent. The price is 0,99 EUR.

Original number of customers was 1000. This number increased by 1 percent. The number of costumers is 1010.

  1. Zero elasticity demand

Zero-elasticity demand is a situation when consumers do not react for change of price.

Example

Original price of bread was 1 EUR. This price does not increased/decreased.

Original number of customers was 1000. This number does not increased/decreased.

  1. Endless elasticity demand

Endless elasticity demand is a situation when consumers react for change of price infinity.

Example

Original price of bread was 1 EUR. This price increased by 4 percents. This price is 1,04 EUR.

Original number of costumers was 1000. This number decreased by 8 percents. This number is 1080.

Characteristics of supply

Supply is a rate which shows how many sellers are able to sell. The main factors are price and amount.

The law of increasing supply

Increased price is characterised with increased selling. Decreased price is characterised with decreased selling.

Types of supply

  1. Aggregate supply

Aggregate supply is a total amount of products and services which sellers are able to sell.

  1. Individual supply

Individual supply is a supply of one type of products and services from one seller. 

  1. Partial supply

Partial supply is a supply of one type of products and services from many seller

Elasticity of supply

  1. Elastic supply

1 % change of price means increasing / decreasing of supply for more than 1 percent.

  1. Inelastic supply

1 % change of price means increasing/ decreasing of supply for less than 1 percent.

  1. Unitary elasticity supply

1 % change of price means increasing/ decreasing of supply by 1 percent.

  1. Zero elasticity supply

Zero elasticity supply is a situation when sellers do not react for change of price.

  1. Endless elasticity supply

Endless elasticity supply is a situation when sellers react for change of price endless.

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