Give examples to illustrate what is the law of supply and demand, and analyze its operation mode.

The objective relationship between demand, supply and price is called the law of supply and demand. It determines the mechanism of price formation and market operation. Demand and supply determine the market price, and the intersection of demand curve and supply curve (that is, industry demand curve and industry supply curve) determines the market price of products.

The intersection of supply and demand curves means that demand is equal to supply at this time, which means that transactions at this price can meet both supply and demand.

The trading volume at this time is called the equilibrium trading volume, the supply and demand under the equilibrium price; The price at this time is the equilibrium price, which means that the market demand of this commodity is equal to the price when the market supplies it.

When the price is unbalanced, there will be a tendency to make the price trend, which will change the direction of the price and eventually become balanced. As long as there are no new interference factors, the price will not change, and the market has reached equilibrium at this time.

The formation mechanism of equilibrium price;

The equilibrium price of commodities is formed under the spontaneous adjustment of market supply and demand forces. When the price deviates from the equilibrium price, the deviated market price will automatically return to the equilibrium price level under the action of the market mechanism.

When the price "; Balanced price? For begging? Demand side lowers prices, suppliers reduce supply, and prices fall.

When the price

Edit changes in demand and supply

Changes in demand and supply bring changes in market prices and trading volume, which are manifested in three situations:

(1) The situation where the supply is constant and the demand changes (the demand curve moves due to changes in non-price factors). The change of demand will lead to the change of equilibrium price and equilibrium trading volume in the same direction.

The performance is: the demand increases, the equilibrium price and the transaction volume increase; When the demand decreases, the equilibrium price and trading volume will decrease.

(2) The situation that the demand is constant and the supply changes (the supply curve moves due to changes in non-price factors). The change of supply will cause the equilibrium price to change in the opposite direction and the equilibrium trading volume to change in the same direction.

The performance is: the supply increases, the equilibrium price decreases, and the trading volume increases; Supply decreases, equilibrium prices rise, and trading volume decreases.

③ Demand and supply change at the same time.

If demand decreases (increases) and supply increases (decreases), the equilibrium price will decrease (increase).

If demand and supply increase or decrease at the same time, the change of equilibrium price depends on the degree of increase or decrease of both parties.

(1) The above law of supply and demand only applies to a perfectly competitive market. The formation of price depends entirely on the supply and demand sides of the market.

(2) The supply curve and demand curve used here are the curves of the whole industry (that is, the market), not the supply and demand curve of enterprises.