What is a proposal?

Every educated person should understand what is the supply and demand in the market and how these concepts influence the price level. As you know, manufacturers can not provide an unlimited number of goods and services, as potential buyers are not able to consume the entire volume. In order to streamline the market system, an indicator such as a proposal is used. It is the volume of all products delivered to the market in a unit of time or for a certain period.

Considering that such a proposal, it is worth considering that it reflects not only the actual presence of goods on the market, but also the volume of products that the supplier can deliver on the customer's first request. The modern economic and political situation in the country allows entrepreneurs to make their own decisions about who and how much to produce. The producer, in turn, determines the maximum volume of production, relying on analytical data. Experts draw appropriate conclusions on the basis of an objective law reflecting the dependence of supply and price. Indeed, there is a connection between these indicators, because any increase in the value of the goods leads to an increase in the amount of undistributed profits, which gives grounds for expanding business.

In order to understand what supply and demand are, you also need to understand the interaction of these concepts. With the increase in demand for goods, that is, when buyers are ready to buy more products, manufacturers are beginning to increase the volume of supplies. If we represent these concepts in the form of a graph in one plane, then two intersecting lines are obtained. At the point of intersection, an equilibrium price is established, that is, a state is attained at which the quantity of goods that the target audience can consume is delivered. Thus, demand generates supply and vice versa.

Among the factors influencing the proposal, I would especially like to single out non-price factors. These include the cost of raw materials for production, the degree of tax burden, inflation expectations. For example, with an increase in the cost of raw materials and constant prices for manufactured goods, the head of the enterprise has to reduce the volume of finished products. Accordingly, in the graph, the supply curve moves to the left. The reverse dynamics is observed with a decrease in the cost of raw materials: output increases, and the curve shifts to the right.

Quite often, state bodies regulate the market supply system of taxation. If the government decides to support the development of an industry, the tax rate for such enterprises is reduced. Then the entrepreneur has more equity, which allows him to increase the output. As an equally effective lever, it can be noted various grants and subsidies specifically designed to develop or expand the activities of individual organizations.

When considering the question of what a proposal is, it is necessary to study this concept in conjunction with other factors.