Gained from the text with that you gained at your specialized lectures. Discuss it in a small group

Basic Text. The Economic Situation

A specific situation formed in the world market is sometimes characterized by the ancient Latin

term “conjuncture” (economic situation, state of the market, market situation, or economic conditions).

The market situation is varying with many changing parameters. The economic situation

Usually involves a great number of concepts.

A) The first thing is, of course, the demand and supply relation, or the market equilibrium

(balance).

Supply is determined by a number of influences. The first is price itself: the higher the price, the

More profitable it is, other things being equal, for producers to sell a good and the more they will

attempt to sell. The second is the cost of inputs: the lower are costs, the more profitable it is to sell

a good at a given price and more will be offered for sale. The third is the price of other goods: when

The price of other goods rises, the supplier of a good may find it advantageous to switch his production

To the supply of the newly high-priced goods rather than stay in the relatively less profitable

Industry, where supply will fall. It should be noted that supply is planned supply, not necessarily

What is actually sold. The latter depends on equilibrium in the market.