Demand is essentially good that are ready to be bought. The prices can vary depending on the good
Demand is essentially good that are ready to be bought. The prices can vary depending on the good, and these are expected to be bought in some given time frame. Supply are the goods that are ready to be sold. Prices will also vary, and goods are also expected to be sold within some type of specific time frame (Erfle, Keat, & Young, 2013).
Many things play a role when we think about the supply and demand for the short run, and the long run. Factors such as machinery needed, materials needed, the environment, statistics of future expectations, etc. Planning in advance is essential to ensure that there is not a shortage, or surplus. There are also scarce resources to consider. There are curves, such as the number of people selling. If there are many people selling the same good, the supply will be greater. To keep up with the competition, it would be best to know what the selling prices is for these particular goods, to ensure we have a competitive advantage (Erfle, Keat, & Young, 2013).
It’s best to keep a balance, and many things can affect the equilibrium of both the short and long run. If we look especially at the short run, we see that demand will cause fluctuation in both the competitive market, and also what the output is. In the long run, input factors can vary. We can never know for sure what may happen, such as maybe a new company opening nearby who will also supply the same goods that we do, or an environmental issue that arises and changes our ability to have proper supply for the demand at that time. There are things to consider as well, such as how much risk is acceptable, or can the company actually avoid bottlenecks, as well as interruptions, when it comes to supply (Kraljic, 1983).
Erfle, S. E., Keat, P. G., & Young, P. K. (2013). Managerial Economics: Economic Tools for Today’s Decision Makers (7 ed.). Upper Saddle River: Pearson.
Kraljic, P. (1983). Purchasing Must Become Supply Management. Harvard Business Review,. Retrieved from https://www.nevi.nl/sites/
Why is it important for managers to understand the mechanics of supply and demand both in the short run and the long run?
Managers are required to make complex decisions on a daily basis, especially when dealing with preserving and ordering merchandise, they must investigate a variety of issues relative to the price. Some of the issues may consist of capital price, administrative costs, storage fees, shrinkage, tariff, and insurance (Holdren & Hollingshead, 1999). Supply and demand can change in business at any given time. Therefore, it’s important for managers and organizations to be flexible enough to adjust to the ever-changing economy.
Supply is the amount of merchandise or service that consumers are prepared to sell at different costs within a particular time-frame, meanwhile, demand is the number of products or services that consumers are prepared to purchase at different costs within a particular time-frame (Keat, Young, & Erfle, 2013). In addition to that, long-run is a time in which new suppliers get involved in an industry or suppliers already in an industry may depart from the market, whilst, short-run is a time in which only individuals already existing in the industry may reply to a modification in industry fee by utilizing more than or less than their unstable materials (Keat, Young, & Erfle, 2013). It is crucial for managers to comprehend the process of supply and demand to be able to figure-out the kind of supply or demand approach which is necessary to reduce any risks or ambiguity (Kraljic, 1983).
Give examples of companies whose business was either helped or hurt by changes in supply or demand in the market in which they are competing.
The car business is one of the most crucial monetary sectors by income. In 2009, the car business in India was affected tremendously by continuing global monetary catastrophe. The car industry was debilitated by a considerable rise in the costs of automotive gas from 2003 until 2008. Costs of car is one of the primary factors that affected the supply and the demand of a car (Gupta, 2017).
Holdren, D. P., & Hollingshead, C. A. (1999). Differential pricing of industrial services: the case
of inventory financing. The Journal of Business & Industrial Marketing.
Retrieved on September 29, 2016 from
Keat, P. G., Young, P.K., & Erfle, S.E. (2013). Managerial economics: economics tools
for today’s decision makers. Boston: Pearson
Kraljic, P. (1983). Purchasing must become supply management. HBR. Retrieved on January 18,
Gupta, N. (2017). Factors affecting demand and supply of automobile industry. Retrieved on
January 18, 2017 from
i need two SEPARATE paragraphs with at least a reference each. make a substantial contribution in the paragraphs