How do the laws of supply and demand affect ongoing business, and what policy or system could you use to help? Please give one example of an effect of supply or demand and then describe how you would manage the situation. Please be detailed and specific with a tangible example.
Sample Solution
The law of supply and demand is a fundamental economic principle that states the price of a good or service is determined by the level of supply and demand for it. If there is an increase in demand but no change in supply, then prices tend to rise as competition increases. Likewise, if there is an increase in supply but no change in demand, then prices can decline due to buyers having more options available to them.
In an ongoing business setting, understanding these basic principles can help inform both strategy and policy decisions. For example, let’s say you own a retail store that sells hats. During winter months you may experience an increase in demand for your product due to seasonal trends – people may want warmer hats around this time of year etc.. In order manage situation appropriately could implement system whereby production capacity increased (e.g., hiring extra staff) so that not only will satisfy customers needs better also help secure larger profits since likely able charge higher prices given limited availability product itself.
All things considered laws supply/demand play huge role everyday operations any successful venture so important stay up date both current industry trends overall economic climate ensure right measures taken advantage opportunities present themselves while avoiding unnecessary risks associated with making wrong decisions!
Sample Solution
The law of supply and demand is a fundamental economic principle that states the price of a good or service is determined by the level of supply and demand for it. If there is an increase in demand but no change in supply, then prices tend to rise as competition increases. Likewise, if there is an increase in supply but no change in demand, then prices can decline due to buyers having more options available to them.
In an ongoing business setting, understanding these basic principles can help inform both strategy and policy decisions. For example, let’s say you own a retail store that sells hats. During winter months you may experience an increase in demand for your product due to seasonal trends – people may want warmer hats around this time of year etc.. In order manage situation appropriately could implement system whereby production capacity increased (e.g., hiring extra staff) so that not only will satisfy customers needs better also help secure larger profits since likely able charge higher prices given limited availability product itself.
All things considered laws supply/demand play huge role everyday operations any successful venture so important stay up date both current industry trends overall economic climate ensure right measures taken advantage opportunities present themselves while avoiding unnecessary risks associated with making wrong decisions!