demand and supply analysis
Demand and Supply Analysis
In the discipline of economics, there are several different types of analysis theories that have been put down by several different economists. The demand and supply analysis is useful for companies and small businesses to assessing market conditions and subsequently, taking appropriate decisions.
- More Supply, Less Demand: This kind of situation is known as surplus. Prices of goods in such a situation are low; this implies that more the supply, lesser is the cost.
- More Demand, Less Supply: This condition is known as deficit of supply. In such a situation, there is more demand and less supply, which leads to a rise in the price level. The lesser the supply, the more is the price and more the demand, higher is the price.
- Equilibrium: This is the ideal stage in any market. In such a situation, the price is not very less and also not very large; it is precise. Such situation is desirable in any market as it ensures a great level of price stability.
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