What are the curves of supply and demand?
supply and demand curves are graphs used in economics and business theory to explain how optimal prices are achieved and how consumers behave. These curves and the relationship between the supply and demand that is expressed in them are often used as a justification to support the free market system. The curves try to graph the behavior that people show when buying and selling the product to illustrate how the price change can affect the market.
Understanding the supply curves and demand involves understanding how and why curves are drawn and what curves are. The tension line on the curve represents the availability of the product type. A curve demand line represents the total number of potential buyers for the product or product demand.
Suppose for example, a computer is created. If the computer costs $ 1 dollar (USD), then almost every $ 1 would like a computer because the price was so low. The product demand would therefore be very high. On the other side beforeLet us make a computer that costs $ 1,000,000. Because the vast majority of people who wanted a computer could not afford it, demand would be very low.
supply and demand curves map this relationship and show how supply can affect demand. Since the product becomes smaller and cheaper, eventually the demand for its increase. When the demand increases, the price of the product will rise again and the demand will drop.
Therefore, all curves of supply and demand are eventually reached the optimal point. This point is achieved when the supply is equal to the demand and will create less than the optimal environment when changing. Defenders of the free market system who believe that people behave rationally say that the market sets a fair price for goods when the superstructures and demands are at the most optimal level.
If the product is too low, people who really needEje, this product is likely to buy it. Although this may result in more sales for manufacturers, it would not necessarily be good, because the system would be ineffective in the sense that people would buy a product they didn't need. Likewise, the manufacturer would not earn as much money as he could, because he could potentially charge a higher price.
If the product is too high, those who really want will not be able to buy it. The manufacturer will also lose money in this situation. As a result, the product manufacturer appreciates it at a level where its profit is maximized.