define demand and supply of goods
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Demand: The number of customers showing interest to buy a product (goods) in a particular Market.
Supply: The number of units of a product (goods) supplied into that market.
"Demand:Supply" plays a major role in determining the value(price) of a product.
The value(cost) of a product raises in the market when Demand for that product is higher than the supply of that product in the same market. & vice-versa.
Eg-1., ("Demand>Supply" = Raise in value)
Suppose A shopkeeper sells a laddu for ₹5. If each person of a group of '25' people wants to buy 1 laddu everyday, and if only 10 laddus are available with the shopkeeper daily, then the shopkeeper may raise each laddu's cost to ₹12 in order to reduce the excess number of customers demanding the Laddus in his shop. Hence more desperate and affordable customers will buy the laddus as soon as possible.
Eg-2., ("Demand<Supply" = Fall in value)
If the shopkeeper has 15 laddus everyday to sell for ₹10 each, and if only 7 people are demanding a laddu each daily, then the shopkeeper will have a remaining of 8 unsold laddus everyday. Now the shopkeeper may reduce the cost of each laddu to ₹5, so that the customers are encouraged to buy more laddus for the same cost.
Supply: The number of units of a product (goods) supplied into that market.
"Demand:Supply" plays a major role in determining the value(price) of a product.
The value(cost) of a product raises in the market when Demand for that product is higher than the supply of that product in the same market. & vice-versa.
Eg-1., ("Demand>Supply" = Raise in value)
Suppose A shopkeeper sells a laddu for ₹5. If each person of a group of '25' people wants to buy 1 laddu everyday, and if only 10 laddus are available with the shopkeeper daily, then the shopkeeper may raise each laddu's cost to ₹12 in order to reduce the excess number of customers demanding the Laddus in his shop. Hence more desperate and affordable customers will buy the laddus as soon as possible.
Eg-2., ("Demand<Supply" = Fall in value)
If the shopkeeper has 15 laddus everyday to sell for ₹10 each, and if only 7 people are demanding a laddu each daily, then the shopkeeper will have a remaining of 8 unsold laddus everyday. Now the shopkeeper may reduce the cost of each laddu to ₹5, so that the customers are encouraged to buy more laddus for the same cost.
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