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Demand and Supply Is Useful Tool in Business Decision Making

In: Other Topics

Submitted By zifan
Words 486
Pages 2
In business decision making most useful tool is demand and supply. Demand and supply are very broad area in economics. It will talk about very thing in the business. If do not know about the demand and supply, then cannot make a decision on the business. In this easy will discus about the demand and supply and other tools of business decision making.
A market is a set of arrangement by which buyers and seller exchange goods and services. Let us look about demand. Demand can be described as the relationship between quantity demanded for a particular good or service in specific circumstance. Also demand is define as the quantity of a good or service that consumers are willing and able to buy at a given price in a given time period. Each of us has an individual demand for particular goods and services and the level of demand at each market price reflects the value that consumers place on a product and their expected satisfaction gained from purchase and consumption. The following example gives a demand curve. Price | | | | | | | | 30 | | | | | | | | | | | | | | | | 20 | | | | | | | | | | | | | | | | 10 | | | | | | | | | | | | | | | | 0 | 2 | 4 | 6 | 8 | 10 | 12 | Quantity |

The demand curve shows an estimate about the relationship between the price of any particular product or service and the quantity of that product that will be demanded by consumers. It is usually assumed to slope downward, in the general case, for most products and services. Another words, the lower the price of the item, the greater the quantity of it that will be demanded.

Market demand curve is refers to the demand for a good by all the consumer in the market, within a time period. The following example is given demand schedule in a market consisting of only 2 consumers, Ahmed and Fathun.
A Demand Schedule of a Market

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