We explain what the offer is, its characteristics and how it relates to the demand. In addition, what are the elements that determine it.
The term offer comes from the Latin offerre, which means offer . This word has different meanings, one of them could be defined as the promise to fulfill or deliver something. It can also be understood as the reduction of a price . But where the concept acquires greater importance is in Economy , where it is understood as one of the engines of the market.
The offer can be defined as the quantity of goods and / or services that different organizations , companies or people have the capacity and desire to sell in the market, in a certain period of time and space, in a particular monetary value, in order to satisfy desires and / or needs.
The law of supply is understood as the variation of the disposition of goods and services in a market , whose changes are closely linked to the change in prices. If prices are high, the offer increases, on the contrary, if prices go down, the offer will do the same.
Some key elements of the offer are the following:
Supply and demand are two terms that are closely linked . When talking about demand , reference is made to the quantity of goods and / or services that people wish to acquire. The offer is another of the engines of the market.
When these two market forces come together, they are the determinants of the quantity of goods and / or services that will be produced and at what price they will be sold . It is not necessary the presence of any other agent to set the prices in case there is talk of free supply and demand.
However often the governments decide to intervene in the formation of prices and availability of products or services. For this, various techniques can be used, such as the granting of subsidies so that prices are lower or production increases. Other times you try to reduce this consumption or production and for this you can increase the tax burdens.
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