Do you remember what I was looking for its fifth birthday? For what its 15th? The wishes are perhaps the clearest way to demand showcase, the desire or the need for which a person wishes to obtain. We all want something and we all have various elements to maintain our lives. Demand that arises in a system of Economics analyses what people want, why they want to, and how price affects their wishes.
All humans are equal when it comes to is an absolute necessity for life. We all need food, water, shelter and in some areas of clothing. We have a choice in which we can produce these same elements for their own consumption, or we can decide to purchase them. All are needs outside wants, such as a car, electricity and computers, these things are not necessary for our survival, but improve the quality of our lives.
Consumption of these goods and various services that make up what is known as demand. While consumption has always been present in every economic system, the amounts vary according to the development of a country at a point in time. The United States for example relies mainly on expenditure for the activity of consumers and more industrialized countries, the strong consumer spending is the next stage of economic development.
So what people want what they want? The answer is value. The buyer sees some value in obtaining a product or service, and taking into account all the available options, it will want to get that product that gives the maximum value for spending. How a person comes to decide what he wants (needs are basic to survival remember) it is better to leave the issue of psychology, but it can be generalized in that wants to because of a perceived value of some type.?
With regard to the wishes, a person choose which gives better value and when that object decreases in value, the consumer can use replacement; where a product replaces another and provide similar value. The cost of replacement is what value can have these resources provide another type of one object to another. The turning point where a person decides to replace their misery is where price comes first image.
A price is lower for a given product, which usually require more. The trade-off price allows to predict what the higher price is for a specific product, minors that were demanded and bought.
Thus, for example, let's say noodles college students demand Ramen in a particular city. Substitutions of Ramen noodles are Americans noodles, instant rice and spaghetti. As each person has their own unique tastes, perhaps a majority will be buy Ramen due to the perceived value, such as the low-cost, taste and convenience. Some will buy U.S. noodles, some may buy instant rice, substitutions will be in use, but it can always vary the quantity used. If the price of Ramen increases (all equal), we can see a significant amount of the passage of the students to one of three alternate members, not because it is for some new tastes, but due to market incentives, reducing the value of Ramen in comparison with other products.
The demand for any product or service is relatively generated instantly. You can decide one day that you want to from potato flour instead of wheat flour for cooking, due to a higher perceived value in cooking products, but if you decide to buy from potato flour, it is possible that fate due to low demand. What happens if potato flour became increasingly more defendant for many people? How can you provide a market for changes in consumer demand? The supply of a product is also necessary in an economic system and will be explained below.
Objectivist Blogger covers an area of economic interest every Friday. Read the next post, the supply of goods in an economy here or visit http://ObjectivistBlogger.com today!
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