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Established in 2006 as a Community of Reality

Welcome to the Neno's Place!

Neno's Place Established in 2006 as a Community of Reality


Neno

I can be reached by phone or text 8am-7pm cst 972-768-9772 or, once joining the board I can be reached by a (PM) Private Message.

Established in 2006 as a Community of Reality

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Established in 2006 as a Community of Reality

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    How are prices determined by supply and demand?

    Rocky
    Rocky
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    How are prices determined by supply and demand? Empty How are prices determined by supply and demand?

    Post by Rocky Sat 22 Jul 2017, 2:49 am

    How are prices determined by supply and demand?



    22/7/2017 12:00 am

    Adnan Kanani
    As inflation means the continuous rise in the overall level of prices, in other words the reward of the decline in the value of money, it is obvious that the interpretation of inflation is linked to understanding prices and money; it is useful to give a simple and concise background on how to determine prices through the law of supply and demand.
    The problem of the first economic theory is to try to find a balance between the two opposing types of incentives. "Supply and demand. It is the nature of prices that are constantly changing, and economics is a useful and effective tool for interpreting changes in prices, the theory of demand and supply. Demand is sourced from buyers, and supply is sourced from producers or sellers.
    There is an inverse relationship between the prices and quantities of commodities required when other conditions remain the same, provided that the other conditions remain the same. In other words, it is possible that the demand for goods will increase during a period, despite the increase in prices during the same period due to external factors such as rising incomes or changing tastes Or seasonal conditions, for example.
    The correlation between the price of goods and the quantity producers want to produce and sell when other things remain the same. What is more, because producers want to earn profit, so the higher the chance of making a profit, the more they want to produce more. The opportunity to make a profit, they wanted to produce less. "
    The above is a summary of the relationship, otherwise it has many specifications and details, including the balance of supply and demand, and the supply and demand in the market to try to find a balance between them;
    When the factors that supply or demand depend on, the supply or the demand changes, and then changes in the balance of the market from the point of view. On the quantitative side , economic phenomena are, of course, usually more complex than the previous explanations. Economic forces operate simultaneously, It moves both supply and demand simultaneously, and previous concepts and perceptions are not enough to understand these complexities, yet they remain the basis.
    There have been many studies in industrialized countries on the impact of migration, which in many respects is similar to the recruitment of labor in the Gulf countries to wages in those countries. The initial understanding is that the influx of migrants increases the supply of labor, which means lower labor prices (wages).
    The question here is whether this initial understanding is always achieved?
    Studies in Western countries have shown that immigration has led to lower wages in cities and has not caused other cities. These studies have been conducted in cities such as Miami and New York, which have seen large waves of immigrants and have seen no decline in wages compared to other cities and urban areas that absorbed fewer immigrants , But wages have fallen.
    The demand for labor in the first group is strong, unlike the second, so it is not just about how much the supply moves just because of migration,
    but also about the movement of demand for
    labor.
    What would happen to wages if demand increased, and other things would remain the same, if there was no migration at all? There will be a work deficit, pushing wages higher, increasing the number of those willing to work, even reaching a new equilibrium point, and rising wages of workers in companies will cause higher operating costs.

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