As we know the sound of the law of demand is when prices rise the quantity demanded will decrease, and if the price drops then the quantity demanded will increase. In the law of demand quantity demanded will be inversely proportional to the level of prices of goods. Price increases will cause a reduction in quantity demanded, this is because:
* Rising prices cause a decline in consumer purchasing power and will result in a reduced number of requests
* Rising prices will cause consumers to find substitutes that are cheaper.
In economics there is a request (demand) and supply (supply) which converge to form a meeting point in the unit price and quantity (of goods). Every trade transaction there must be demand, supply, price and quantity are mutually affecting each other.
A. Definition of Supply and Demand
Demand is the number of items purchased or requested at a price and at a certain time.
Offer is the number of items being sold or offered at a price and at a certain time. Examples of market demand in Kebayoran Lama is acting as the buyer's request. While sales are bidding. When transactions occur between penbeli and seller will agree its the second transaction occurred at a certain price that may result from bargaining.
B. Law of Demand and Supply
Law of Demand (ceteris paribus): the amount of product in the requested inversely with the price, meaning that if prices go up then the demand will go down and vice versa. This condition is ceteris paribus means that all the factors that influence the enactment of the law of demand is considered permanent.
Laws Offer: number of products offered directly proportional to price, meaning if the price rises then the amount of demand will also rise and vice versa.
C. Factors Affecting the Rate Demand (Demand)
1. Consumer behavior / consumer tastes.
Currently mobile phone Blackberry is a trend and many are buying, but the next few years may already be considered old-fashioned blackberry.
2. Availability and price of similar goods substitutes and complements.
If the bread does not exist or was very expensive then meises, butter and margarine will drop his request.
3. Revenue / income consumers.
People who have a great salary and benefits he could buy a lot of things he wants, but if a low income then someone will probably save the use of items purchased so infrequently buy.
4. Approximate prices in the future.
Goods whose prices are expected to rise, then people will hoard or buy when the price is still low such as fuel / gasoline.
5. The amount / intensity of consumer needs.
When the bird flu and swine flu was the craze, protective masks products will be very popular. In the month of fasting (Ramadan) request cantaloupe, cucumber queen, grass jelly, syrup, ice cubes, dates, etc. will be very high compared to other months.
D. Factors Affecting Rate Offer (Suply)
1. Production costs and the technology used.
If the cost of manufacture / production of a product is very high then the manufacturer will make the product less the price is expensive for fear of being unable to compete with similar products and the products are not sold. With the advanced technology could lead to cuts in production costs so that the trigger price declines.
2. Company objectives.
Companies that aim for profit maximization (profit oriented) will sell its products with large profit margins so prices so high. If the company wants its products sold and dominate the market, the company set a low price with low profit levels, so prices will be low to attract customers.
3. Taxes.
The tax increase will cause the prices to be higher so fewer companies offering products due to consumer demand fell.
4. Availability and prices of substitute / complement.
If there is a similar competitor products on the market at a cheap price then consumers will have to switch to cheaper products, so a decline in demand, supply was eventually reduced.
5. Predicted / estimated price in the future.
When the selling price will go up in the future the company will prepare by increasing production output, hoping to offer / sell more when prices rise due to various factors.
E. Mathematical Analysis of Demand and Supply
Request
This analysis serves to draw and calculate the price and the number of requests for easy and mathematically. The things to note are:
Ø demand function is written: Qd = a - b * P
Where: Qd = quantity demanded
a = constant b = gradient of the line P = price of goods
Ø The formula equation through two points
P - Q P1 - Q1
P2 - P1 Q2 - Q1
Offer
Ø Special Functions written: Qs = - a + b * P
Where: Qs = quantity of goods on offer
a = constant b = gradient line P = price of goods
Ø The formula equation through two points
P - Q P1 - Q1
P2 - P1 Q2 - Q1
