“THE DEMAND-SUPPLY MODEL”: MECHANISM, ADJUSTABILITY, COSTS, AND REGULATION
Abstract
The article explores the essence of key economic concepts – demand, supply, the interaction mechanism between demand and supply, and market equilibrium – with the aim of adapting to market dynamics. It emphasizes that manufacturing enterprises must maintain current and forecasted assessments of demand for their products to avoid errors in production planning. This is also crucial when coordinating assortment plans, both in terms of timing and quantitative indicators related to demand volumes and trends. Two opposing viewpoints are examined: proponents of complete market freedom, who oppose government intervention in pricing, considering it a distortion of market mechanisms, and those who advocate for demand regulation through monetary policy, credit availability, employment levels, and supply-side adjustments via changes in lending and investment policies.
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