In a society every person engaged in gaining their support in different way.Some people by supplying there services and merchandises to others to erning their support. From that they live and satisfy their demands. Such an economic system consider as an economic system of a town, state and economic system of the universe. As stated by A.J.BROWN, “ Economy is a system… by which people of an country earn their life ” . ( T.R.JAIN, O.P.KHANNA.2009-2010 ) In tradition, different state has different economic system, economic system like planned, free market, and mixture of this two economic system. In free market economic system there is no authorities intervation and all dicision taken by single and house. In ecomony demand and supply of a merchandise is affected by many factors other than monetary value, and harmonizing to it motion and displacement in demand and supply curve is occure.
Monetary value AND EFFECT ON DEMAND AND SUPPLY:
2. Demand:
Definition:
Harmonizing to Ferguson, “ Demand refers to the measures of a trade good that the consumers are able and willing to purchase at each possible monetary value during a given period of clip, other things being equal. ” Demand of a merchandise is shaped by consumer, they may demand merchandise on the footing of stutus, gustatory sensation, income. ( T.R.JAIN, O.P. KHANNA. 2009-2010 ) . Now people like little, less weight, expression of laptops. IDC study that pc cargo in 2006 was 10.1 and increase upto 16.7 in 2007.people more demand portable laptos than desktops. ( www.v3.co.uk )
RELATIONSHIP BETWEEN DEMAND AND PRICE:
Demand of any merchandise is affected by monetary value of the merchandise. Harmonizing to Marshall, “ The jurisprudence of demand provinces that amount demanded addition with a autumn in monetary value and diminishes when monetary value addition, other things being equal. “ This relationship between demand and monetary value is called jurisprudence of demand. Here merchandise is computing machine. There are two grounds by which demand of computing machine affected in the market.
1. INCOME Consequence:
In this recession clip, people have less income to pass. In this state of affairs if monetary value of the computing machine is rise, consumer will non able to buy computing machine with their money. Because of that measure demanded of computing machine is fall. This is called income consequence when monetary value of the computing machine ( merchandise ) is rise.
2. SUBSTITUTION Consequence:
In the competitory market there are many replacement for one merchandise, like Compaq laptop have a rival like dingle, Samsung, Sony. If monetary value of Compaq is rise consumer switch from Compaq to dell and demand for dingle will lift. This is called the permutation consequence when monetary value rise. ( JOHN SLOMAN. 2006 )
Demand CURVE:
In the market people are demand for laptops at different monetary value. This can be presented in graph. When informations of monetary value and quantity demand of a merchandise nowadays in the graph we get demand curve.
2.1 Demand for computing machine: [ 4 ]
Monetary value of the laptops ( monthly )
( In lbs )
Demand of laptops
( per month )
A
Bacillus
C
Calciferol
Tocopherol
100
200
300
400
500
1000
800
600
400
200
( T.R.JAIN, V.K.OHRI. 2009-2010 )
In the table 2.1 we can see measure demanded of laptops at different monetary value. In graph 2.1 on Y axis it demo monetary value of the laptops in lb. And on x axis it show quantity demanded of laptops. At point Tocopherol when monetary value of laptop is 500 lb than demand of laptop is 200.
After few clip monetary value of laptop is bead from 500 lbs to 300 lbs, at point hundred demand of laptops is now go up and make at 600 per month. Than it is continuously decrease in demand and increase in monetary value of laptops. This line from A to E is called demand curve. ( JOHN SLOMAN. 2007 ) .
FACTORS AFFECTING Demand:
In a free market economic system many factors other than monetary value is affected demand. Their are many rivals in free market economic system. Slide alteration in their programs can impact demand of a merchandise. Some of the factors are describe as under,
Monetary value of the chief merchandise ( compaq computing machines ) [ motion in demand curve ]
Monetary value of the other related merchandise.
Preferences of the consumer.
Income of the consumer [ displacement in demand curve ]
Expectations of monetary value alterations in hereafter.
Population. ( T.R.JAIN, V.K.OHRI. 2009-2010 )
Monetary value OF THE MAIN PRODUCT:
Demand of the computing machine is affected by many factors, so there are opportunities of addition and lessening in monetary value of the computing machines. Harmonizing to jurisprudence of demand there is an opposite relationship between demand and monetary value. Price is decrease by alteration in consumer preferance, debut of new engineering. For illustration company like compaq, monetary value of the laptops is lessening in the Indian market due to technological promotion. Demand for laptops is increase due to this alteration in monetary value. ( K.G.ARORA. 2007 )
In above graph on ten axis it shows monetary value of the computing machines and on y axis it shows quantity demand of the computing machines. D is demand curve for computing machines. It clearly shows that when monetary value is decrease from P to p2 demand for computing machine is incease from Q to q1. This creates motion along demand curve. In demand curve, point A is move towards point B. ( T.R.JAIN, V.K.OHRI. 2009-2010 )
2. Monetary value OF THE RELATED PRODUCT:
Demand for laptops is besides affected monetary value of their utility merchandise and complementary merchandise. Price of the merchandise is alterations because of other merchandise offer better service, advantages in technology.For illustration demand of sony laptops is affected by monetary value of the dingle laptops. If Dell offer lawer monetary value, demand of Sony laptops go down.it is called utility consequence. This create sift in demand curve. Demand curve displacement from A to B.
Sony usage Intel processor for some laptops, if monetary value of Sony laptop is goes up demand for Intel processor is goes down, this is called complementary consequence. [ 7 ] In the fig. demand lessening from A to B. when monetary value of Sony decrese from P to p1. Demand for Intel lessening from Q to q1.
3. Preference OF THE Consumer:
Taste and penchants of the consumer affect demand of that merchandise. If penchant is in favor of that merchandise, demand for that merchandise is high in the market. Preference of the people in favor of the merchandise by old experiences, manner, position, and alteration in technology.like some people likes expencive merchandise.
4. Income OF THE Peoples:
It is common in an economic system that income and demand moves at a same way. When income of a consumer addition demand for other merchandise is besides addition. Demand for inferior goods and merchandise for necessities of life is show differente relationship with income.In a instance when consumer expect income rise in future,
1. Inferior goods:
There is an opposite relationship between inferior goods and income.when income of a consumer is rise there is a lessening in demand for an inferior goods.
2. Normal goods:
Normal goods are those good which are expencive. When income of the consumer is increase they like to buy good which are expencive, show position. There is a direct relationship between income and demand for normal good. In below fegure when income additions from Y to y1 demand besides increases from Q to q1. ( T.R.JAIN, V.K.OHRI. 2009-2010 )
5 EXPECTATIONS OF PRICE CHANGES IN FUTURE:
Demand of the merchandise is besides affected by future outlook of consumer. If consumer think that there is rise in monetary value of a merchandise in future, they trie to buy every bit many as they purchase and demand in the market is besides rise.
6. Population:
There is a direct relationship between population and demand.population screens child, males, females, grownups. In state when male ‘s ratio in population is high in that state of affairs demand for adult males merchandise high in that state.
Supply:
To provide merchandise for a market, house have factors of production like land, labor, capital.
Firm have to make up one’s mind what Resources and engineering are needed to provide good in the market, how much they get net income from it. Quantity supply means house desides what measure of goods
Supply in the market at a right clip and at a right monetary value.
Law of supply:
When other factors are same, when monetary value of a merchandise is high in the market to ern net income from that manufacturer supply more. There is a positive relationship between supply and monetary value.
Supply curve:
Relationship between monetary value and supply describe as under.
Monetary value OF LAPTOPS SUPPLY OF LAPTOPS
A 100 1000
B 200 2000
C 300 3000
D 400 4000
E 500 5000
In a figure, x axis represent monetary value of a computing machine and on y axis it show supply of computing machine at a monetary value of 100 lb supply was 10 million computing machine. When monetary value addition from 100 lb to 400 lb supply besides addition from 10 to 40 million.
FACTOR AFFECTING Supply:
1. Monetary value OF FACTORS OF PRODUCTION:
Now a twenty-four hours ‘s most of the company provides inexpensive laptops to their clients to achive gross revenues. But that non means they sacrifice in quality.decline in the monetary value of laptops because production cost of laptops is decrease twenty-four hours by twenty-four hours. ( Titus Hoskins. ( 2009 ) . When monetary value of factor of production like rent, land, labor is increase manufacturer have less net income to bring forth, so at that clip they trie to place different merchandise with low cost. Due to this alterations Supply of chief merchandise is decrease. Like Introduction of Windowss 7 addition supply of Acer laptos. Increase in supply is increase from 15 % to 25 % in 2009 due windows 7 avaibility in the market. ( windows7news.com ) .
In a graph we can easy see that when monetary value of window 7 addition from 90 lbs to 100 lbs supply of Acer laptops besides increase from 15 % to 20 % . This creates motion along supply curve. On supply curve supply of Acer laptops addition from point A to point B.
2. Monetary value OF Related Merchandise:
Monetary value of the related merchandise affect supply of chief product.related merchandise has two types.
1. Substitute:
Dell and Sony laptops are utility for each other.but they are maid by different manufacturer so monetary value alteration in one will non impact supply of the other. For illustration both laptops maid by one company than when monetary value of the dingle laptops increase manufacturer more supply dingle and retrieve every bit much as Net income Company can. Producer less supply of Sony laptops.
2. Complement:
In supply curve when complement merchandise are made from one provider if monetary value of one merchandise addition supply of complementory merchandise besides addition. Because suppleir more interasted in supply more when monetary value of a merchandise rise.For dingle and Compaq Company Intel processor is a complementory merchandise. In recent twelvemonth monetary value of laptops is traveling down so Intel have to cut down at that place monetary value every bit good as supply to remain in the market. ( BBC. 2001 ) .
Monetary value of related merchandise create displacement in supply curve.
3. Expectation OF Company:
Market is change twenty-four hours by Day.if Company expect that there wil be an addition in monetary value of a merchandise in future, company is traveling to cut down their supply now and hive away them to derive advantage from that.
4. Government Policy:
Government policies besides affect supply of the merchandise. Supply by other beginning autometically traveling to diminish if revenue enhancements on import and export is increase by authorities than.new revenue enhancement rate implemented by UK authorities. Tax rate addition from 40 % to 50 % . This will impact 3, 00,000 peoples and other company. This revenue enhancement rate applies on high earners whose income is 150000. Supply of laptops will traveling to fall due to that addition in revenue enhancement. ( www.rttnews.com )
The monetary value of computing machines has continued to fall due to some resons discuss as under.
1. Monetary value of the chief merchandise: ( apple laptops ) :
Monetary value of the chief merchandise affect demand and supply of laptops industries.if monetary value of apple laptops inceases, demand for that merchandise is fall in the market. But manufacturer supply more to pull client. Like in 2009 monetary value of apple laptos 4 % higher than their compititor dingle. Due to that demand of apple autumn from 16.4 to 13.7. But manufacturer supply more to remain in the market.
In a graph we can see that demand autumn from 16.4 to 13.7 and on demnad curve it reduces from B to A. this create motion on demand and supply curve. ( hypertext transfer protocol: //mac.blorge.com )
New engineering introduce by company:
When new engineering introduce by a company demand and supply for that merchandise is increase in the market. For illustration Apple is a celebrated company around the universe. Apple intoduce their new merchandise calls ipod touch. In first one-fourth ended on December 2008, demand for ipod touch is 22,727000. Company make racord of erning $ 10.17 billion. Supply of iPod is increase in that twelvemonth. ( www.apple.com )
Monetary value of utility merchandise:
Demand and supply of merchandise is besides affected by addition and dicrease in the monetary value of utility merchandise. Like dingle and compaq cut down their monetary value by 29 % to increase sale in the market. This consequence demand for apple laptops, demand is decrease. There is no alteration for supply of apple laptops.
We can easy demo that demand of apple autumn and rich from Q to q1. ( Mike Johnson. ( 2001 ) .
Conclution:
In the market Numberss of providers increase twenty-four hours by twenty-four hours, they are come with different quality and offer greater services.each provider come with different thoughts. Some one offer free bringing, great price reduction on purchase to pull consumers. To remain in the market each company cut down their monetary value.
