Supply and demand. The role of the state in the formation of a balanced economic system

Supply and demand - the most important concepts that make up the basis of any economic system. The interdependence of these two factors follows the economic law. Another important concept directly related to these factors is price.

Demand reflects the ability and willingness of a potential buyer to buy a particular product for a certain amount of financial resources, in a strictly defined price and quantity range. The volume of demand can fluctuate and depends on many factors that affect it. This includes the money level of the consumer's income, and the size of the market, seasonality, inflation, the availability of other substitutes for goods, and others.

The proposal, in turn, reflects the opportunities and desire of potential producers to sell certain goods in a specific quantity at certain prices for a strictly limited time. The supply volume, as well as the demand, fluctuates and depends on the possibilities of production (the involved capacities, used technologies, availability of material and labor resources, taxes, etc.).

Moreover, Supply and demand on the market Ideally should be balanced. Then there will be no shortage of goods or overproduction. The proposal is formed by law, according to which its value grows with the growth of the price value. Demand is formed by law, according to which its value decreases with the growth of price value.

Based on this, Laws of supply and demand Interact with each other in real life. An example of them is the current system of the modern market economy of the Russian Federation, when pricing is formed at the intersection of the curve of interaction of the elasticity of supply and demand. It's no secret that the market economy of any state is subject to fluctuations and the equilibrium development of the magnitude of supply and demand is far from each other. The modern market is still an unbalanced balance, when the supply exceeds demand or demand exceeds supply. In the first variant, this may be due to overproduction of consumer goods and services, increased prices for them or low purchasing opportunities. In the second variant it can also be associated with low incomes of the population and a high level of prices. The greatest return for the development of any economic system creates an equilibrium price. Such a price is formed under the condition of free competition and creates an ideal balance between the volume of supply and demand, ensuring the greatest value of economic efficiency from the progressive development of production, the market of goods and services in general. Therefore, the state authorities, by their decision, try to influence the pricing of goods, forcibly setting threshold limits, thus regulating supply and demand.

The balance of the domestic market and its solvency plays an important role in the development of the production process, since the market is the most important area where there is an exchange and distribution of material goods (exchange of goods and services). The labor market, the capital goods market , the capital market, in a broad sense, influence the structure and volume of goods produced, the level of incomes and the solvency of the population, thus creating demand and supply. The state through targeted integrated programs helps producers to develop not only by allocating subsidies to production, but has a direct impact on the formation of sales of goods and services, thereby regulating supply and demand. Various methods apply to methods of state regulation. These are preferential preferences, subsidies, customs policies aimed at protecting the domestic market, as well as measures that promote the comprehensive development of exports of goods and services, etc. It is easy to see at the same time that the role of the state in the formation and development of a clear balanced economic system is satisfied is significant and very important.