they tend to produce less because there are less demands for that product
Supply curves slope up and to the right. As the price goes up, suppliers are willing to produce MORE product. Conversely, as the price goes up, consumers demand LESS of a good or service. As a result, the demand curve slops down and to the right.
All else unchanged, a decrease in demand for a particular good or service will make suppliers less motivated to produce that product. In the short run, consumer prices will go down so that suppliers can get rid of excess inventory, but they will also start to make less of the product. When the excess inventory is gone and fewer goods are being made, the price will rise to meet the new level of demand.
producers would supply less than consumers would be willing to consume at that particular price. There would be SHORTAGE
The consumers would buy less of that product
The determinants of supply are: technology, input prices, number of suppliers, expectations, and changes in prices of other products. Technology allows firms to produce more at the same or at a lower cost. This decreases the marginal cost of a firm and increases the market supply. Input prices are the costs of the factors needed to produce the good. Labor, materials, rent costs are all input prices. If input prices increase, supply will decrease because it is more costly for a given firm to supply the same amount of goods. Input prices can be pretty flighty as most prices of commodities can change over night. If there are more suppliers, the market supply curve will shift to the right lowering price and increasing quantity. If there are less suppliers the market supply curve will shift to the left increasing price and decreasing quantity. If expectations state that the price of a good will increase, suppliers will withhold their good until the price increases therefore decreasing supply. If expectations state that the price of a good will decrease, suppliers will try to sell off their good therefore increasing supply. The change in complements and substitutes are important for suppliers too. If a firm produces a plethora of products, it must judge which products to produce more based on the competitive market price. If a furniture store sees an increase in price for chairs it will shift its production toward chairs and away from sofas. The same logic applies to if the housing market is booming then the firm should look to produce more of all furniture because houses and furniture are complements.
Supply curves slope up and to the right. As the price goes up, suppliers are willing to produce MORE product. Conversely, as the price goes up, consumers demand LESS of a good or service. As a result, the demand curve slops down and to the right.
When there is a shortage of something in demand, the price goes up. When the price goes up, there are less people that will buy. Then they produce more of that thing and the price drops for that thing drops as there is a surplus.
All else unchanged, a decrease in demand for a particular good or service will make suppliers less motivated to produce that product. In the short run, consumer prices will go down so that suppliers can get rid of excess inventory, but they will also start to make less of the product. When the excess inventory is gone and fewer goods are being made, the price will rise to meet the new level of demand.
producers would supply less than consumers would be willing to consume at that particular price. There would be SHORTAGE
The consumers would buy less of that product
They will produce less of it because when the price raises, the buyers want less of it because the price is too high.
The determinants of supply are: technology, input prices, number of suppliers, expectations, and changes in prices of other products. Technology allows firms to produce more at the same or at a lower cost. This decreases the marginal cost of a firm and increases the market supply. Input prices are the costs of the factors needed to produce the good. Labor, materials, rent costs are all input prices. If input prices increase, supply will decrease because it is more costly for a given firm to supply the same amount of goods. Input prices can be pretty flighty as most prices of commodities can change over night. If there are more suppliers, the market supply curve will shift to the right lowering price and increasing quantity. If there are less suppliers the market supply curve will shift to the left increasing price and decreasing quantity. If expectations state that the price of a good will increase, suppliers will withhold their good until the price increases therefore decreasing supply. If expectations state that the price of a good will decrease, suppliers will try to sell off their good therefore increasing supply. The change in complements and substitutes are important for suppliers too. If a firm produces a plethora of products, it must judge which products to produce more based on the competitive market price. If a furniture store sees an increase in price for chairs it will shift its production toward chairs and away from sofas. The same logic applies to if the housing market is booming then the firm should look to produce more of all furniture because houses and furniture are complements.
The determinants of supply are: technology, input prices, number of suppliers, expectations, and changes in prices of other products. Technology allows firms to produce more at the same or at a lower cost. This decreases the marginal cost of a firm and increases the market supply. Input prices are the costs of the factors needed to produce the good. Labor, materials, rent costs are all input prices. If input prices increase, supply will decrease because it is more costly for a given firm to supply the same amount of goods. Input prices can be pretty flighty as most prices of commodities can change over night. If there are more suppliers, the market supply curve will shift to the right lowering price and increasing quantity. If there are less suppliers the market supply curve will shift to the left increasing price and decreasing quantity. If expectations state that the price of a good will increase, suppliers will withhold their good until the price increases therefore decreasing supply. If expectations state that the price of a good will decrease, suppliers will try to sell off their good therefore increasing supply. The change in complements and substitutes are important for suppliers too. If a firm produces a plethora of products, it must judge which products to produce more based on the competitive market price. If a furniture store sees an increase in price for chairs it will shift its production toward chairs and away from sofas. The same logic applies to if the housing market is booming then the firm should look to produce more of all furniture because houses and furniture are complements.
When the supply goes down, the price goes up because there is a shortage and there are less to be sold. When supply goes up on account of high prices, the price goes down because there is a surplus. If the demand goes up, the price goes up because people will pay more for it than usual. If the demand goes down due to the increased price, the price goes down.
price ceiling makes a bar on the equilibrium prices. it compels the suppliers to charge the ceiling price from the consumers. it is generally lower than the equilibrium price. at this price quantity supplied is less than the quantity demanded and the market is not in equilibrium.
supply and demand/ it states that as the price of a good or service goes down the more demand will increase and as the price goes up demand decreases
Things like quality and service levels may be sacrificed if the suppliers think buyers are focused only on price. Workers may be pressured to do more for less pay.