Wednesday, September 8, 2010

Micro Economics - Understanding the Law of Demand and Supply

Micro-economy is a concern with
  1. Determining the price we pay for products and services.
  2. What is the output required by the market.
  3. The effects of government intervention in market forces.
Understanding the micro-economy will help us to analyze the nature of the offer and demand concepts and how they affect the operation of a market economy.

A. Request
In the case of the micro economy, demand is defined as the relationship between product prices and customers' desire to buy a certain quality.The laws also demand to price and quality of the sale, if such price increase in the quality of product sold decrease and the price, the quality of reduction products sold increased.

B. Supply
Supply results reflect the readiness of suppliers to produce and sell at market prices that occurred and these factors affect all high supplier. provided. For most products, the amount offered will be increased by increasing the price level, all other factors remain constant.
Supply law determines as a) the amount offered to increase the price.
b) Quantities offered smaller with lower prices.
c) manufacturers increase their product price increase supply.

C. Demand and supply Equilibrium
When prices fell to the buyer willing to pay, it resulted in a balance. But the effect occurs when the price is too low. In fact, the strength of demand and supply leading to equilibrium price and quantity.
a) Because the demand is greater than supply, price level increases.
b) A greater supply than demand, price level fell.
c) Only one equilibrium price guarantee

D. Other influences have four fundamental change we can learn, any changes affecting the supply or demand:
a) a positive demand trends will increase demand.
b) a negative demand shift will decrease demand.
c) positive supply shift will increase demand.
s) negative supply shift will decrease demand.

E. Government intervention
Government intervention designed to achieve:
a) the fair distribution of income among individuals and regions.
b) To promote the employment and income growth.
c) To protect low-income recipients.
and include:
a) the minimum wage.
b) rent control.
c) The Council Farm marketing.
d) Tax.

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