In the study of economics, all the interactions between supply, demand, and price are usually expressed by mathematical formulas. These formulas are often illustrated by points on a graph. Imagine a graph with price on one side and quantity （supply） on the other.
In the study of economics, all the interactions between supply, demand, and price can often be expressed by mathematical formulas. These formulas often appear graphically. Imagine that one side of a chart is the price, and the other side is the quantity of goods supplied.
The points where the price and quantity intersect represent the demand. The same is true of a graph that shows supply. These graphs show how supply, demand, and price interact.
Changes in demand are manifested in the mutual influence between price and quantity of goods. The same chart can also reveal changes in supply. These icons show how supply, demand, and price affect each other.
A DELICATE BALANCE
Delicate balance
In a perfect economic world, supply and demand would always be balanced, or be equal, a condition called equilibrium. The amount of goods available would exactly equal the demand for those goods. Sellers would be selling, buyers would be buying, and everyone would be happy.
In a perfect economic world, supply and demand are always balanced or equal. This situation is called equilibrium. The quantity of goods that can be purchased is exactly equal to the demand for this product. The salesperson will sell the product, the buyer will buy the product, and everyone is happy.
This can be shown on a supply and demand graph as a perfect intersection, creating a giant X on the graph.
The interaction between supply and demand is just right. In the supply and demand table below, you can see that two lines form a huge X.
Supply and demand can be represented in a graph. Supply and demand can be represented in a graph
.
However, economic equilibrium in supply and demand really only exists in theory. It doesn’t happen in the real world, because supply and demand, affected by many different factors, are constantly changing. Many factors can result in disequilibrium, when supply and demand aren’t balanced.
Then, the economic equilibrium between supply and demand only exists in theory. It will not happen in the real world. Because supply and demand will be affected by many different factors and will continue to change. When supply and demand are out of balance, many factors can lead to imbalance.
Maybe the price for a good or service is too high, so demand is low. Or the price for something is low and many people want it, but sellers run out.
It may be that the price of a certain product or service is too high, leading to a decline in demand. Or the price is too low, causing many people to want to buy, but there is no supplier.
This graph shows equilibrium, which happens when the amount of goods available exactly equals the demand for those goods.
Equilibrium is shown in the chart, and it will only happen when supply and demand are highly consistent.
MORE EXCEPTIONS TO THE RULES.
More exceptions to the rule
Rules can almost always be broken. There are situations where the economic “rules” are actually broken in the markerplace. One example is something called a Giffen good. This type of good is in greater demand as its price rises, especially if a related good becomes more expensive.
The rules are always broken. There are many times in the market that do not conform to the principles of economics. For example, a product called Giffen good, which is a kind of raw material products related to Giffen good, even if the price rises, the demand is still increasing.
It's also often a lower-quality product without any easily available substitutes. Staple foods – something that many people rely on to eat every day – are a good example of a Giffen good. Imagine that rice becomes more expensive. People who buy it would have less moeny to buy more expensive foods lie flour.
There is also a low-quality product that makes it difficult to find substitutes. Named Staple food, it is a food that many people must eat every day. This is a typical Giffen good. Imagine that rice has become more expensive. Those who spend more money on rice purchases will also spend fewer people on flour-related foods.
So they would end up having to buy more rice, because they can’t afford the more expensive foods and need to compensate by buying more rice to eat.
So they eventually had to buy more rice, because they could not afford more expensive food, so they bought more rice to compensate.
Many people rely on rice - an example of a Giffen good -.. To eat every day If it becomes expensive, they give up more expensive foods and buy more rice to compensate
many people rely on to eat rice every day - the example of a Giffen good . If rice becomes expensive, they will give up some expensive food and buy more rice as compensation.
Goods with “snob appeal,” like this Lamborghini car, are examples of Veblen goods. Luxury goods like this may give the people who buy them a higher social status.
There are many snob appeals, such as Lamborghini cars, which are examples of Veblen goods. Luxury goods like Lamborghini give those who are willing to buy it a higher social status.
Veblen goods, also known as show off goods, are used to describe a commodity in economics. Its characteristic is that the demand for goods has a positive relationship with the price of goods, rather than the reverse relationship of the normal law of demand.
snob appeal 的解释：Snob appeal refers to the qualities or attributes of a product that might appeal to a consumer with “snobby” tastes. It may refer to the actual product itself or the exclusivity the consumer could potentially experience as a result of owning the product that is being advertised.
Veblen goods are also goods that increase in demand as their price increases. Unlike Giffen goods, these goods are high-quality status symbols(status symbols), like expensive sports cars or designer clothing. Veblen goods are usually marketed as being “exclusive” and make consumers who buy them feel successful and important.
Veblen goods are also a type of goods whose prices will rise when demand increases. Unlike Giffen goods, these goods have high-quality status symbols, just like sports cars and fashion. Veblen goods are often regarded as "exclusive" to certain social classes, making customers who are willing to buy them feel successful.
They might have a strong brand name(brand name; brand name) identity, like a Lamborghini car or Tiffany jewelry, and they may be available only in boutique stores(boutique stores 精品店), not department sotres(department stores department store) . This gives these products more “snob appeal,” since the people who buy them are very conscious of their social status.
They have a strong trademark, like Lamborghini sports cars and Tiffany jewelry, they are usually available in boutique stores , Not a department store. All these make such products more "snob appeal", because people who are willing to buy these products will be very concerned about their social status.
bontique shop的解释：A boutique shop is actually a specialized type of retail store. It is distinct from other retail businesses based on its more limited size, scope and inventory.
A boutique (French: [butik]) is “a small store that sells stylish clothing, jewellery, or other usually luxury goods”.[1
The higher the price gets, the more appeal (charm) the good has. The buyers of Veblen goods usually have a great deal of money. The higher the price of the goods
, the more attractive. Customers who buy Veblen goods are usually financially rich.
Vablen luxury goods aren't just for adults. Many teens and young adults buy certain brand-name items, like jeans, because they are popular and expensive.
Vablen luxury goods are not just for adults. Many teenagers and young people buy products of specific brands, such as denim warehouses, because they are more popular and expensive.
NO PERFECT COMPETITION
There is no perfect competition
All ruls in economics operate with the assumption that the market has perfect competition. This would mean that in the marketplace, all buyers and sellers are alike and no one has more power to infulence price than anyone else. This isn’t how the real world works.
All laws in economics have a premise that the market is fully competitive. This means that all buyers and sellers in the market are relatively similar, and no one has more power than others to influence prices. But the real world does not work like this.
The Bell Telephone Company, owned by AT&T, once had a monopoly on US telephone service. But in 1982, the government ruled that they could no longer control the phone industry.
Bell Telephone Company, which owns AT&T, once monopolized the US telephone service. In 1982, the government stipulated that they could no longer control the telephone industry.
Some individuals or groups of buyers and sellers have enough power to influence pricing more than others. They might have a powerful brand name to sell. Some individuals or groups of buyers and sellers have more power to influence pricing more than others
. They have more famous goods to sell.
They might be a group of buyers who supply a chain of big stores and are able to buy a great deal of merchandise(n. 商品；货物) at once. if either buyers or sellers can directly influence the price of something, the market won’t react according to the economic rules.
Sometimes there might be a product with only one supplier, which is called a monopoly. The company that is the supplier can set any price it want because it is the only one who can supply the product.
Demand by consumer will determine how much of that product is bought, but it won’t influenct the price at all. Some US industries, like the telephone system, were once monopolies.
All telephone service went through one company, the Bell System, owned by AT&T. Consumers had to pay whatever price that company set for its products. However, in 1982, the US goverment ruled that the Bell System could no longer have a monopoly on phone service.