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It occurs both ways. I must say supply leading to demand 15-20% and demand leading to supply 80%
Initially when a product is launched, because of supply some customers may opt to buy it. But all further sales would happen only when there is a demand for the product. Only when there is a demand for a product, the shop owners would buy them, the stockists would sell them and the manufacturers would make them.
Let us say you want to open a company that manufactures Tooth paste. Assuming you live in a country where people do not brush at all, would you still want to manufacture it? Even if you do, there would '0' demand for your item. So, you may not manufacture it at all... So in any economy, demand drives the supply in nearly 80% or more cases.
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∙ 14y ago
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How are prices determined in a well functioning economy?
By simple supply and demand theory. The more demand, or the less supply, will lead to higher prices. The less demand, or more supply, will lead to lower prices.
Aggregate supply curve is perfectly inelastic an increase in agregate demand will lead to?
Inflation.
What is likely to lead to a decrease in the price of a good?
Demand decreases and supply remains the same.
What is an increase in demand likely to lead to?
If there is an increase in demand, there will be increase in the price of the product if the supply remains the same. But if the manufacturer or supplier is able to supply increased quantity of product there will be no major effect.
What is most likely to lead to a decrease in the price of a good?
Demand decreases and supply remains the same.
How are prices determined in a well functioning economy?
By simple supply and demand theory. The more demand, or the less supply, will lead to higher prices. The less demand, or more supply, will lead to lower prices.
If people decided to have more children doest it affect to demand and supply?
If significant numbers of people decided to have more children, it may affect supply and demand. It would lead to more demand and less supply.
How the increase in expansion affect the demand?
Increase in expansion affect the demand because more supply/expansion with constant demand will lead to excess in expansion which affect the demand.
Aggregate supply curve is perfectly inelastic an increase in agregate demand will lead to?
Inflation.
What is likely to lead to a decrease in the price of a good?
Demand decreases and supply remains the same.
Is likely to lead to a decrease in the price of a good?
Demand decreases and supply remains the same.
What is an increase in demand likely to lead to?
If there is an increase in demand, there will be increase in the price of the product if the supply remains the same. But if the manufacturer or supplier is able to supply increased quantity of product there will be no major effect.
What is most likely to lead to a decrease in the price of a good?
Demand decreases and supply remains the same.
What most likely to lead to a decrease in the price of a good?
Demand decreases and supply remains the same.
What is most likely to lead to a decrease in the price of goods?
Demand decreases and supply remains the same.
Which of these is most likely to lead to a decrease in the price of a good?
Demand decreases and supply remains the same would lead to a decrease in the price of a good.
How do lead times and forecast errors affect supply chain performance?
The longer the lead time the longer the supply chain and can lead to delays in delivery which will result in customer dissatisfaction. Forecast errors may either result in shortages of materials if underforcasted the demand. this may in turn result to shortages in meeting the customer demand
