Book: Yu. Mamedov. Modern economics. Page 6

Expensive goods are bought precisely because they are consistently expensive, and the benefit that the buyer receives is the hope of a win-win investment in money savings (for example, the purchase of gold, jewelry, furs, land, houses, apartments, paintings, items of applied art, rarities ). And since they are consistently expensive, i.e. the price of these goods tends to increase, then there is still the same hope - to profit from tomorrow's prices.

Nobody knows how prices will actually behave. But the mass buyer acts instinctively, that is, in accordance with the current trend.

The dynamics of the quantity of demand is influenced not only by the real price movement, but also by the one expected by the buyer, that is, not only the real, but also the expected price. The socio-psychological state of mind becomes an economic factor. The magnitude of the increase in demand when prices rise quantitatively characterizes the degree of inflation panic in society.

Each participant in a market economy strives to increase his income: a reduction in the price of a given product allows him to realize this cherished goal, but only by purchasing this cheaper product!

Reducing the price of a product makes it accessible to those categories of buyers who previously could not afford it. And an increase in the number of buyers means an increase in the demand for a given product. It is more difficult to explain the behavior of buyers of a given product, who increase the volume of its purchase precisely when the price decreases. The easiest way is to assume that some buyers purchased the product in a smaller quantity than they needed, and now, thanks to a reduction in price, they bring the amount of demand to the real need.

In everyday language, the law of demand can be defined as follows: the lower the prices, the greater the quantity demanded, and the higher the prices, the smaller the quantity demanded.

To understand modern economic theory, it is very important to realize that demand is only a potential purchase, but whether it takes place or not depends on many factors. Special science (marketing) is concerned with one thing - how to help demand turn into a real purchase.

Demand is the effective need of buyers for a given product at a given price. In other words, demand is not every need for a given product, but only that which is ensured by the availability of means of payment (money) from the buyer.

A market economy is an endless interaction of supply and demand. Indeed, any act of purchase and sale is preceded by two phenomena - supply and demand, the magnitude of which determines the volume of transactions and the price level on the market. And since a market economy is the dynamics of prices and the volume of transactions, it is possible to achieve their desired change by regulating the amount of demand (influencing the income of consumers) and the amount of supply (influencing the profit of producers).

The goods and services offered on the market have a very important property for the consumer - the ability to satisfy his needs. This property in economic theory is designated by the term utility. Of course, for each consumer the degree of usefulness of various goods is not the same and is determined by his subjective preferences.

For goods to become easily accessible, money must become difficult to obtain; If it is easy to get money, it will be difficult to find goods

A civilized market economy is unthinkable without well-developed subtle instruments of social regulation, legal and social institutions designed to soften and curb the extremes of market relations.

A market economy presupposes the presence of a reserve of production resources. Without such a reserve, it cannot quickly respond to changes in market conditions. In other words, there must be a supply of raw materials, equipment, finance and labor (the latter means that a market economy is characterized by a certain degree of unemployment)

The desire for one's own benefit is a constantly and effectively operating motive for economic behavior. For another participant in a market economy, the benefit of a given individual is someone else’s benefit, and therefore lost by this other: in a market economy, someone else’s benefit is always regarded as one’s own loss.