Finance: Short Run and Long Run Supply and Demand
Not what you're looking for?
Why do you believe that it is important for managers to understand both short run and long run supply and demand? Cite one hypothetical or real life example that illustrates your response.
The demand for audio CDs has greatly increased over the last decade. According to the laws of supply and demand, price rises as demand increases. The price of CDs, however, has fallen during this period. Explain the apparent contradiction.
Purchase this Solution
Solution Summary
This solution provides a detailed discussion on the importance of managers understanding both short run and long run supply and demand.
Solution Preview
Why do you believe that it is important for managers to understand both short run and long run supply and demand? Cite one hypothetical or real life example that illustrates your response.
In economics, prices play a crucial role within the efficiency story. As a result, both producers and consumers rely centrally on price as changes constantly occur within the cost of making alternative decisions. Economic theory states that the price of commodities lean towards the optimal point at which both short-run and long-run demand is met by supply. The price so determined is usually referred to as the market-clearing price (supply and demand).
Managers need to thus understand both short run and long run supply and demand in the determination of aggregate demand within their organizations and how to effectively meet this. Also ...
Purchase this Solution
Free BrainMass Quizzes
Academic Reading and Writing: Critical Thinking
Importance of Critical Thinking
Motivation
This tests some key elements of major motivation theories.
SWOT
This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.
IPOs
This Quiz is compiled of questions that pertain to IPOs (Initial Public Offerings)
Paradigms and Frameworks of Management Research
This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.