Understanding the correlation between demand and supply is one of the fundamental requirements for gaining competence in economics. The specified correlation represents the primary ratio that defines the emergence of new companies, the choice of business strategies, and the changes in communication approaches. Therefore, determining the demand and supply curve is instrumental to finding equilibrium price and quantity. To locate the latter two variables, the government and private companies identify the points at which the supply and demand curves intersect. The point in question allows government and private companies to locate the strategies that will lead to economic efficiency and a subsequent rise in profitability (Gillespie 185). Namely, by identifying the equilibrium, organizations can determine the saturation of the market, as well as the approaches that can be used to cater to a specific demographic and meet its needs.
The portfolio completed for this project was essential in building my skills of managing business processes and making financial forecasts for the organization based on the rates of demand and supply. Moreover, completing the portfolio has been very helpful in gaining proper knowledge of how governments and private companies handle challenges that occur once the correlation between demand and supply shifts form its equilibrium. For instance, the search for a compromise that will allow avoiding imposing expenses on stakeholders has been recognized as an important part of using the supply and demand curve (Gillespie 340). In addition, the theory in question has indicated that every transaction occurring in a market sends immediate ripples across the entire economic environment, affecting further choices and defining the changes that other companies will have to make to adjust to the new circumstances.
Works Cited
Gillespie, Andrew. Foundations of Economics. 4th ed., Oxford University Press, 2016.