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its easy, when supply is increased, the price decreases. A decrease in price leads to an increase in demand. So technically supply creates its own demand.
Supply function is not what is available for supply, it is clearly defined as "what is the quantity of goods that suppliers are willing to supply at each price". So even if a supplier has ample stock it does not mean it is the supply of that product
. Technically supply is fixed by the producer or supplier who fixes it through their willingness. Thus supply is directly proportional to price. If price increases supply increases and vice versa. The logic behind this is if price goes up "having the cost of production at the same level" the profit margin increases. thus to earn more profit more quantity is supplied at high price and vice versa.
Thus generally speaking supply cannot create its own demand unless the good is a perishable one which the supplier cannot have more shelf life and it has to come to market causing the price to decrease effecting in high demand.
What else can I help you with?
What are the three characteristics of a supply curve?
The three characteristics of a supply curve are the slope, shift, and the curve's position. Together they help determine supply and demand trends.
What is needed to determine equilibrium price of a good or a service?
a supply curve and a demand curveA supply curve and a demand curve.
Relevance of Income elasticity of demand?
-determine the nature of the commodity -it can be applied in the intersection of marked demand and supply of commodities -help firms to respond to changing economic situations.
How does the interaction between supply and demand determine prices in a market?
The interaction between supply and demand in a market determines prices. When demand for a product is high and supply is low, prices tend to increase. Conversely, when supply is high and demand is low, prices tend to decrease. This balance between supply and demand helps establish the market price for a product or service.
Do buyers and sellers as one group determine demand but only seller determine supply?
Yes. Buyers want a product and those that sell it regulate how much of it they sell to the buyers, therefore controlling the supply as a result of the demand.
What are the three characteristics of a supply curve?
The three characteristics of a supply curve are the slope, shift, and the curve's position. Together they help determine supply and demand trends.
What Determine child trafficking?
Supply and demand.
What Two main factors that determine price?
The two main factors that determine price are supply and demand. When supply increases or demand decreases, prices tend to fall. Conversely, when supply decreases or demand increases, prices tend to rise.
What is needed to determine the equilibrium price of a good or services?
a supply curve and a demand curveA supply curve and a demand curve.
What is needed to determine equilibrium price of a good or a service?
a supply curve and a demand curveA supply curve and a demand curve.
Relevance of Income elasticity of demand?
-determine the nature of the commodity -it can be applied in the intersection of marked demand and supply of commodities -help firms to respond to changing economic situations.
What two factors determine market structure?
demand and supply
What can greatly determine the price and availability of a good or service?
supply and demand?
How does the interaction between supply and demand determine prices in a market?
The interaction between supply and demand in a market determines prices. When demand for a product is high and supply is low, prices tend to increase. Conversely, when supply is high and demand is low, prices tend to decrease. This balance between supply and demand helps establish the market price for a product or service.
Do buyers and sellers as one group determine demand but only seller determine supply?
Yes. Buyers want a product and those that sell it regulate how much of it they sell to the buyers, therefore controlling the supply as a result of the demand.
How does supply and demand determine prices?
The more of something you have the less you will get for it but the less of something you have the more you will get for it.
In a free market supply and demand determines?
The brilliant thing is that no-one has that job. The buyers determine the demand, without colluding, and the sellers determine the supply. If they get it right, demand equals supply. If demand exceeds supply, people have to queue up. People at the back might shout out that they will play a higher price, so they jump the queue and that drives the price goes up. If supply exceeds demand, some sellers might shout out that they will sell more cheaply than the rest, and that drives the price down.
