Demand and Supply

Demand is the quantity of a good that buyers wish to buy at each price¹. Other things equal², at low prices the demanded quantity is higher.

Supply is the quantity of a good that sellers wish to sell at each price. Other things equal, when prices are high, the supplied quantity is high as well.

The market is in equilibrium when the price regulates the quantity supplied by producers and the quantity demanded by consumers. When prices are not so high as the equilibrium price, there is excess demand (shortage) raising the price. At prices above the equilibrium price, there is excess supply (surplus) reducing the price.

There are some factors influencing demand for a good, such as the prices of other goods, consumer incomes and some others.

An increase in the price of a substitute good (or a decrease in the price of a complement good) will at the same time raise the demanded quantity.

As consumer income is increased, demand for a normal good will also increase but demand for an inferior good will decrease. A normal good is a good for which demand increases when incomes rise. An inferior good is a good for which demand falls when incomes rise.

As to supply, some factors are assumed³ as constant. Among them are technology, the input price, as well as degree of government regulation. An improvement in technology is as important for increasing the supplied quantity of a good as a reduction in input prices.

Government regulates demand and supply, imposing ceiling prices (maximum prices) and floor prices (minimum prices) and adding its own demand to the demand of the private sector.

Пояснения к тексту

1. each price - зд. любая цена

2. other things equal - при прочих равных условиях

3. are assumed - рассматриваются, принимаются

substitute ['sΛbstitju:t] good — товар-заменитель (спрос на который изменяется в противоположном направлении по сравнению со спросом на другой товар, цена на который изменилась)

complement ['komplimənt] good — товар-дополнение (спрос на который изменяется в том же направлении, что и спрос на некоторые другие товары, цены на которые изменились)

normal ['nо:mə1] good — товар стандартного качества

impose [im'pouz] v (on, upon) облагать (налогом, пошлиной кого-л.), налагать (обязательства, штраф); возлагать (на кого-л.); навязывать (кому-л.)

дать; опускаться; понижаться

input ['input] n вложение, вводимый ресурс, затраты, инвестиции

Выберите подходящее по смыслу слово из предлагаемых в скобках вариантов. Предложения переведите на русский язык.

1. The fashion for mini-skirt (increased/ reduced) the demand for textile materials.

2. Even in (some/the same) middle-income countries many people are very poor.

3. Government regulations sometimes (decrease/ impose) a change in (technology/ quantity) that producers do not want to use.

4. Stabilization of prices is of great importance to industrial nations (as well as/as well) the Third World countries.

5. Freeing up (освобождение) prices leads to their (decrease/ increase).

6. (Inferior/ Normal) goods are usually low-quality goods for which there are higher-quality (improvements / substitutes) sold at higher prices.

7. A decrease in (complement/ input) prices makes the production less expensive.

2. Вставьте в предложения следующие прилагательные и наречия, образуя соответствующую форму степени сравнения:

high, important (2), many, large, low, effectively, much, great, clear, reliable, strong (2), quickly