Understanding Economic Concepts

Economics is not simply about money matters. It talks about a wide range of study and discipline. The use of resources is also known as economics. To understand it better, it has two branches. If it is about individual choices, then, it is known as microeconomics. On the other hand, macroeconomics talks about the entire economy. The world’s population is continually increasing. What does it mean? Simply speaking, our daily needs is also continually increasing. But, what about our resources? Do you think it’s enough?

We are facing this kind of problem everyday. As our resources becomes limited, we must always think of other alternatives.

Supply and Demand

These two terms are the basics in the study of economics. Supply is all about the quantity or number of goods or items that a seller wants to distribute or sell with the price decided for that product. What about demand? Demand is all about the product or service that a customer or consumer wants to buy at a particular price.

Price

It is one of the most important things that a customer is always looking for. Aside from the brand and quality, they always look for the price. Is the product or item affordable? The price of a product and also service affects the demand. If a consumer thinks that the price is too high, then, the demand for the product will decrease. A consumer who wants to buy more would rather choose what is right for his budget although the product is quite in a low quality.

For manufacturers, if the price is higher, then they would produce more. This is all about the law of demand and supply.