Changes in Demand

Changes in demand could have occurred because request is essentially a matter of taste. Whether or not they get satisfaction (economists would say usability) of using this product seems simple. However many factors involved in it. Starting from their income levels are similar to the price of goods such as apples and oranges, how much the use of lime for example. One of these factors can change and cause a chain reaction.

Similarly, on the supply side of the offer . What makes the citrus farmers make decisions about the number of oranges that they want to supply the harga in particular? The main consideration is the cost of production with their own fertilizer, labor for picking and packing fruit fuel and other requirements, without forgetting the value of land rent and interest to be paid for, which they borrowed capital. Farmers also have to set a figure on the value of the services they provide and the size of the profits in return for them because of the use of their business activities as well as their exposure to risk. There is also the question of what else can they make with their resources. If the price of lime suddenly rose and they get the lime plant is easier to grow than oranges, they set a higher price to make them continue growing oranges. Likewise, if the prices come down a lot of the limes are originally farmers plant will switch to plant orange juice. In this way, falling wool prices in Australia in the early 1970s caused many graziers diverting its efforts on the farm price of beef cattle that were soon joined plummeted.

The law of supply and demand is undoubtedly responsible for determining the price of most goods in the economic activities are free, and even up to a certain growth, also applies to the socialist system. The law is what is behind the pricing, not just goods we buy in stores, but also include things like interest rates to borrow one, or a transfer fee champion soccer player who mencermintan supply and demand for football talent. It is not surprising if anyone ever says "we can make a parrot into topnotch economist," we need to do is teach her to say the words "supply " and "query".

Similarly, the market mechanism. It includes a charming simplicity. The mechanism appears to have explained everything. But you might start thinking that maybe not all things are determined by supply and demand . Government, for example, or a company that holds the monopoly of the supply of certain commodities, presumably free to choose whatever price they like.

Up to a certain point this is true. Government and the monopolist's total control over the supply and thus can set their prices without fear of any rival that sells at a price lower. But they still have to consider the request. If for example the government to build a new highway and decided to charge high prices for road users may be reluctant to pass riders. That is what experienced West Gate Bridge in Melbourne because the alternative route via Johnston Street riders are free of toll charges. In such cases, the money earned less than if the levy collected is smaller. Situation so that is now being experienced by operators of the freeway. To make their books balance, they are collecting fees that make people reluctant to pass the road tolnya so that they experience deficits worse. As with the government as well as experienced by the company private monopoly. If they do charge a high price for the product them, maybe they will be selling fewer passes a certain point they will cause their products can not be reached "the market" This situation will force them to lower the prices they charge.

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