The economic concepts that influence global business can be applicable even to everyday life. For business managers is essential to be aware of laws of demand, supply, and equilibrium to grow their business. Examples of the mentioned laws are abundant in the daily ground, and by recognizing and exploring them people can learn by observations. The author will discuss the market equilibration process based on example that everyone can relate to – food. Law of demand
Demand is how much consumers are willing to pay for a good or service in particular period. The demand relationship is showing the interdependence between quantity and price. For instance, if the cost for exotic fruits is relatively low, consumers will be willing to purchase more kilograms. On the contrary, side if fruits that are imported in the country are expensive, the buyers are likely to buy just a few as for the remaining sum they will fill in their basket with local fruits. The inverse relationship between demanded quantity and price is defined by McConnell, Brue, and Flynn (2009) as law of demand; it is shown on graph 1.
Graph 1. Relationship between demanded quantity and price
Law of supply
Supply is how much of a good or service the market can offer for a certain cost. The law of supply is the relationship between price and quantity supplied. The graph representing the law of demand has a downward slope. Opposed to it, graph 2 that shows the interdependency between supplies and cost has upward slope representing that the cheaper units are, the more they are sold. Food is a basic necessity. Although consumers look for cheaper options, they also consider including in the menu healthier, diverse, or tasty options that often comes at higher price. The trend also plays important role. In the past years is noticed a yearn from the consumers to buy from the so-called super-foods that are very healthy. The author of the paper is also purchasing...