Supply and demand

SUPPLY AND DEMAND

It is a basic fact of life – anything you will ever want to buy or sell has a price. That price is determined by how much of a product people are willing and able to sell and how much other people are willing and able to buy in other words, supply and demand.

Supply and demand have long been the factors that determine whether the production of a product can be profitable. Supply is the amount of a product available at a specific time and price. Some of the factors that may determine supply are how many people there are in the business of producing that particular product in the market area, how much of the product is coming into the market area from other areas, and the past history of profitability for that product in your area.

Demand for a product is also determined by numerous factors. Demand is the amount of a product wanted at a specific time and price. It is often determined largely by price. The less expensive a product , the more of it will be wanted. How ever, there are other factors that also influence demand for a product. The amount of money available to consumers to buy that product is a factor that is often overlooked. Compettion from similar products may reduce demand. Seasonal variations in demand also needed to be considered.