How The Cycle Of A Country’s Economy Revolves
How the cycle of a country’s economy revolves, everyone’s participation is necessary. The balance of demand and supply is essential for the speed of any economy. Demand is the consumer’s desire.
However, according to the Arthashastra, demand includes the price and measurement of a commodity along with the desire to get it. Business and economy are completely dependent on the fulfillment of consumer’s desire and needs.
How the cycle of a country’s economy revolves: Take the example of a scooter or a bike. They were in great demand at some time. Production was low. Then they had to find numbers in agencies to buy. As demand for two-wheelers increased, many companies came to the region and production increased.
Today, if you have money available, you can buy the bike immediately from any agency. That is, if the balance of demand and supply is made, then scooters and bikes become readily available to consumers.
Important in fixing the price
The price of any commodity depends on its demand and supply. For example, if the demand for a commodity is low and availability in the market is high, then its price will be low.
Conversely, the demand for a commodity is high and availability is low, the price will be high. This shows that demand for goods also affects its production.
That is, if demand increases, there will be opportunities to increase production and consumption of goods in the market will be more. Thus the economy will gain momentum.
Prime factors
If there is more availability of goods in the market then it is possible that the demand for it is less. Due to the fact that the goods are high, its price is low, it cannot be purchased. There are also some items in the market whose demand is negligible.
When an item reaches the maximum consumers, then its demand starts decreasing. Demand decreases even when the expectation from the commodity is not met.
Teej-festivals and seasons also affect demand. On these occasions the demand for goods increases. However, there is always demand in some markets.
This is how the cycle of demand and supply are decided
The role of income is important in determining demand. Demand also increases when people’s income is high. On the other hand if someone has abundant funds available then he will not have trouble in purchasing goods or services.
This may also affect the rule of Wahmang. The quality of goods also affects demand. It also depends on the number of buyers in the market relative to the availability of goods. The competition also affects demand.
Production of goods is determined according to market demand. For example, when market demand increases, suppliers will increase production. However, sometimes the increase in production also depends on future prospects.
