Exceptions to the law of demand. Supply: supply factors, law Supply law briefly

Offer shows how many goods will be offered for sale at different prices.

Law of supply:

All other things being equal, i.e. if resources are available in sufficient quantities and there is no overproduction of goods, then there is a direct relationship between price and supply, i.e. if the price rises, then supply increases, and if the price decreases, then supply decreases.

Let's analyze the sales prices of some goods:

Corollaries from the law of supply:

As prices rise, entrepreneurs receive additional income, which creates incentives and provides opportunities for expanding production.
With rising prices in the production industry of this product Other producers with higher costs may enter, which creates the preconditions for increased competition in the market.

Market supply is influenced by price and non-price price factors.

Price factors influencing supply:

1. Price of a product - there is a direct relationship between price and supply, reflected by the law of supply.

2. Resource prices - if resource prices rise, then supply decreases. This happens for 2 reasons:

firstly, the product will cost more and this will reduce demand.
secondly, producers will spend more financial resources for the purchase of resources, so they will buy fewer of these resources.

3. Prices for related goods - i.e. goods are interchangeable and complementary.

When prices for one of the interchangeable goods (tea) rise, the supply of other goods (coffee, cocoa) will decrease.
When prices for one of the complementary goods (gasoline) rise, the supply of others (cars) will increase.

Non-price factors influencing supply:

Improvement of equipment and technology- application modern technology And high technology leads to an increase in labor productivity, which increases supply.
Taxes and subsidies— if the country has a high level of taxation, then producers receive less income and reduce supply. If the government provides subsidies to producers, they increase the supply of goods.
Number of manufacturers on the market— the more manufacturers of a given product, the wider its supply.
Manufacturers' expectation of rising prices— if manufacturers expect prices for their products to rise, then they hold them in stock and resume shipping them as soon as prices have risen.

Terminology

Demand- one of the sides of market pricing reflects the desire to purchase a certain volume of goods at a given price.

Law of Demand- other things being equal, an increase in price causes a decrease in the quantity demanded; a decrease in price is an increase in the quantity demanded, that is, it reflects the inverse relationship between price and quantity of goods.

Non-price factors affecting demand:

1. Level of income in society.

2. Market size.

3. Fashion, seasonality.

4. Availability of substitute goods (substitutes)

5. Inflation expectations

Offer- reflects the desire of producers to introduce a certain number of goods to the market at a given price.

Law of supply- other things being equal, an increase in price leads to an increase in the quantity of supply; a decrease in price means a decrease in the quantity of supply.

Factors influencing supply:

1. Availability of substitute goods.

2. Availability of complementary (complementary) goods.

3. Level of technology.

4. Volume and availability of resources.

5. Taxes and subsidies.

6. Natural conditions

7. Expectations (inflationary, socio-political)

8. Market size

Description

Market economy can be viewed as an endless interaction of supply and demand, where supply reflects the quantity of goods that sellers are willing to offer for sale at a given price at a given time.

Law of supply- an economic law, according to which the supply of a product on the market increases with an increase in its price, all other things being equal (production costs, inflation expectations, quality of the product).

Essentially, the law of supply expresses the concept that at high prices, more goods are supplied than at low prices. If we imagine supply as a function of price and the quantity of goods supplied, the law of supply characterizes the increase in the supply function throughout the entire domain of definition.

Examples

Food

To circumvent the law of supply and demand in the European Union, the overproduction of oil is stored in warehouses, on the so-called “butter mountain” (German). Butterberg). Thus, supply is artificially restrained and the price remains stable.)

Stocks, currency, financial pyramids

There may be a steady demand for shares sold and purchased on the stock exchange, as enterprises transfer interest payments - dividends - to shareholders. When supply exceeds demand (the number of sellers has increased or there are no more buyers), the price decreases. As a rule, after moving in one of the directions, the price lingers near a certain level. Dividends continue to flow even after the transition to equilibrium and after declines, so demand for shares is sooner or later restored.

Supply is the quantity of a product that sellers are willing to offer to buyers in a certain place, at a certain time, at a certain price.

The law of supply sounds like this: “at high prices, more products than at low” or “All other things being equal, as the price rises, the quantity of supply increases.” This law is expressed by a graphical model (see Fig. 3):

Influence changes in price by quantity supplied are shown by the movement of points along the supply curve. Changes in supply shift the curve (to the left if supply falls and to the right if it rises).

Supply factors: price of the product; resource prices – as they increase, the curve shifts to the left; production technology - affects depending on whether it reduces or increases costs; taxes and subsidies (monetary assistance from the state to firms) - an increase in taxes shifts the S curve to the left, and an increase in subsidies to the right; prices for other goods - capital flows into the industry where prices are higher and incomes are therefore higher; expectations of price increases shift the curve to the right; the number of sellers on the market - the more there are, the higher the supply.

Let's take a closer look influence offer prices. The dependence of supply on price is called elasticity of supply. Its formula is the same as the elasticity of demand, only E is denoted with index S (from the word supply - sentence).

Supply elasticity factors: changes in cost (cost per unit of production) – the relationship is inverse; diversification of production and through it - other sources of profit; degree of utilization of production capacity; time factor. Let's explain the latter. This is the main factor: until supply adjusts to the new price level, a certain amount of time will pass. The longer the time during which the seller of a product can offer his product, the more elastic the supply. This is due to the fact that over a long period of time, the seller has more time to redistribute resources in the right direction and therefore loses less.

Greater elasticity of supply over time is typical for perishable, seasonal and highly fashionable goods due to the need to sell them in a limited time (for example, New Year's outfits and toys).

20. Fiscal policy.

Fiscal policy - the impact of the state on the level of business activity through changes in government spending and taxation. Fiscal policy affects the level of national income and therefore the level of output and employment, as well as the price level. It is aimed against undesirable changes in economic conditions associated with both unemployment and inflation. The state budget is the leading link in the financial system. It combines the main income and expenses of the state. The budget is a system of monetary relations of the state through which the constant mobilization of resources and their expenditure is carried out. The financial relations that the state has with various organizations are called budgetary. They arise in the distribution process and are associated with the formation and use of the central budget fund of funds, which are intended to satisfy general government needs. The size of the budget fund depends on the level of economic development, management method, and social objectives. State The budget is the main budget of the state for the current 3 years, which has the force of legality. A year later, Mr. the budget is mobilized with funds from enterprises and organizations of various forms of ownership, and the income of the population is partially mobilized. The mobilized funds are sent to social and cultural events, to strengthen the country's defense capability, and to maintain state bodies. management, financial support for the budgets of the constituent entities of the federation, for repayment of state. debt for the creation of state. material and financial reserves and to finance the national economy. The mobilization of the state in taxes serves as one of the main means of implementing main economic activities.

Main functions of the budget:

1) distribution of GDP and income between industries and territories;

2) redistribution of income and GDP;

3) government regulation and economic stimulation;

4) financial support for social policy;

5) control over the formation and use of centralized funds.

The functions of the budget are implemented through the budget mechanism, i.e. through ways and methods of generating income and expenses. The budget is an important tool for regulating and stimulating investment in the economy in order to increase its efficiency. The budget size reflects the degree of centralization financial resources in the hands of the state depends on the scale of structural changes in the country’s economy. State The budget is built using the balance deficit and surplus method.

Main objectives of budget policy:

1) keep the economy from declining production;

2) ensure financial stability (consolidation of monetary circulation, reduction of the budget deficit, suppression of inflation);

3) stimulate investment activity;

4) strengthen the budget revenue base by improving taxation and strengthening control over the completeness of tax payment;

5) create a system of effective control over the effective and targeted use of state funds. expenses;

6) strengthen control over the size of the state. debt.

In addition to the federal budget, the NBS system includes the budget of the constituent entities of the Russian Federation (regional) and the local budget (municipal budget). A budget consisting of federal, regional and local is called a consultative state budget. It is used and serves to represent subventions from the federal budget. Subventions are budget funds provided to finance a strictly targeted event on a non-refundable basis.

The funds are designed to ensure the constitutional rights of citizens of the Russian Federation to receive a pension, social benefits in case of illness, disability, loss of a breadwinner, to health care, social benefits. help, etc.

The federal budget, together with extra-budgetary funds, forms an expanded budget or an expanded production budget. The functioning of the budget occurs through the means of generating and distributing income. Revenues create the financial basis for the activities of the state. Through their distribution, the general state is satisfied. income.

Offer is a set of goods that are on the market or can be delivered to it. Sales are carried out in the form of supply, and purchases are carried out in the form of demand. This is the volume of production that producers are willing to sell to consumers at certain prices. In other words, supply is the desire and ability of sellers to supply goods and services to the market for sale depending on their price.

Law of supply shows that manufacturers want to produce and offer for sale more of their product at a high price than at a low price. For the seller, price is an incentive and incentive to produce and sell his product on the market. For consumers, prices are a deterrent because high price forces you to buy less of a product.

Non-price factors affecting supply

1. Cost of resources. Resource prices determine production costs. Therefore, the higher the costs, the lower the supply, and vice versa.

For example, prices for raw materials and materials have decreased.

2. Technology. The use of advanced technology reduces the cost of production. At these resource prices, production costs are reduced and, consequently, supply increases. The curve shifts to the right. If the cost of production increases, this will cause the supply curve to shift to the left.

3. Taxes and subsidies. Raising taxes reduces the capabilities of producers, reduces production volumes, which leads to a shift of the supply curve to the left. With a reduction in taxes, the picture changes to the opposite.

Subsidies are government subsidies, assistance to certain producers. This promotes production and supply growth and shifts the supply curve to the right.

4. Expectations. Anticipating price increases, producers sometimes hold back goods in order to create a temporary shortage of goods and accelerate price increases.

5. Competition. The more firms there are in the market, the greater the supply, and vice versa.

Non-price factors lead to a change in supply, which is expressed in a shift in the supply curve: to the right if there is an increase in supply, and to the left if supply decreases.

Graphically it looks like this.

From the above it is clear that the factors influencing the supply curve are in the plane of motivation for human activity in the economy. This once again proves that commodity producers are engaged in commercial and economic activity just for profit. If prices for manufactured products rise, it means that society needs goods of this kind, “informing” producers about this by purchasing goods at a given price. If such a price level compensates for the costs of commodity producers, then this serves as an accurate criterion for the feasibility of production and its compliance with demand.

Criticism is good. The useful effect of criticism is to help people improve what they are responsible for. The designer is told “the interface is inconvenient”, he improves it, and a user-friendly interface is obtained. The writer is told “you have a typo,” he corrects it, and now there is no typo. Criticism makes the world a better place.

But there's a problem: sometimes criticism is hard to take because it's framed as a personal insult. Such criticism does not achieve any useful effect; relationships and reputation deteriorate because of it.

To achieve benefits, maintain relationships and not spoil your reputation, follow the three laws of criticism.

The first law of criticism. If you don't like it, criticize it

Criticize everything you don’t like, regardless of whether someone else has criticized it and whether you believe in the effectiveness of criticism.

The button in Internet banking does not work - wrote to technical support
The text on the site is poorly worded - wrote to the author
The asphalt in the yard is bad - wrote to the city portal

If you are being ignored due to an important issue, do not hesitate to turn on the “client from hell” and blow the minds of those responsible. It so happens that dispatchers, designers, presidents, programmers, writers and in general all of us constantly criticize those who do not defend their position. If one person reported a problem, the problem doesn't exist. But if a hundred people worry about this problem every day, we will find a way to solve it.

Don't expect the problem to go away on its own. Don’t rely on someone else to tell you about the problem for you. If you don't like it, criticize it.

The second law of criticism. If you criticize, justify it

For criticism to be useful, you need to explain what exactly you don’t like and why it’s bad:

The button is pressed, but nothing happens. I don't receive SMS, I can't pay.
It is not clear from the text what to do after the notification arrives. I didn't do anything and the payment didn't go through.
The asphalt in the yard was laid poorly: there were continuous holes. It is inconvenient to travel by car, and completely impossible by bicycle.

Always criticize the work, but never the person. Don't try to imply that the person in charge is incompetent. This is not possible:

Do you use your own online banking?
Did you hire students to write this text?
What, they cut everything up and there wasn’t enough for asphalt? Just for fun, come into our yard and see the conditions in which your voters live.

Such criticism leads nowhere, because from the outside it looks arrogant. Since criticism is perceived by a living person, he will not want to respond to such criticism. Imagine people writing to your website: “What kind of idiot made this website?”

Criticism is difficult to take: it means that the person in charge did not do their job well. Don't make it worse with arrogant comments. If you criticize, justify it.

The third law of criticism. If you know, offer

My blog is read by designers, writers and developers. Good designer sees bad design around him and knows how to improve it. The same goes for the writer and developer:

The designer, unlike the average user, knows Fitts' law and that the interface is evil. The designer may suggest an improvement that regular user has no idea.

The editor is well-read and studies international experience and understands how to properly draft public announcements. He will make a much more convincing announcement than an ordinary official or citizen.

The developer knows how to optimize animation and knows what 60 FPS is. Where the user sins on a slow computer, the developer is already optimizing the animation.

If you know how to improve something you are dissatisfied with, suggest an improvement. It doesn’t matter whether it is correct or not, whether it will be implemented or not, whether you take into account some subtleties or not. If you know, offer it.

Law in action

This is what unconstructive criticism with passive aggression looks like:

Have you seen the new Alfa Bank website? What a fierce p...t! @alfabank, why are you doing this to us?

It's arrogant and unhelpful. Unless you throw a cheap show-off in front of your friends: look how brave I am, I’m throwing a barrel at Alfa Bank. Unfortunately, this criticism will not help either you or Alfa Bank.

Here's what useful, reasoned criticism looks like:

@alfabank on your website the background video is slow under Chrome on Rasbury. I suggest replacing it with static images if the client is low-power. Here is the code: (link)

Now you have a chance to change Alfa Bank, receive an invitation to work from them, and genuine respect from your friends.

Remember the three laws

If you don't like it, criticize it
If you criticize, justify it
If you know, offer

Practice

I invite readers to practice commenting on this post. Criticize everything you don't like.

Thanks to Artyom Sapegin, Kolya Toverovsky and the Alfa Bank support team.