II34 - Supply/Demand, Origins of Inflation - Economic Principles
Supply and Demand
supply and demand, in economics, relationship between the quantity of a commodity that producers wish to sell at various prices and the quantity that consumers wish to buy. It is the main model of price determination used in economic theory. The price of a commodity is determined by the interaction of supply and demand in a market. The resulting price is referred to as the equilibrium price and represents an agreement between producers and consumers of the good. In equilibrium the quantity of a good supplied by producers equals the quantity demanded by consumers.
Give example of the tickle me elmo, PS5, or any other high demand low supply product. Think hotels charging more for fri and sat night and less m-w.
We have seen examples where the government wishes to stabilize the price of a commodity as to either not make it to cheap or to kept it profitable. One example is how at times farmers may be paid not to farm a certain crop or may get a subsidy to farm a more in demand crop. While this can be a good tool, it should be used with caution as it is easy to have intended consequences as a result of government intervention on supply/demand. For example if the government helps bail out an unprofitable industry, that could can ripple effects throughout the economy. What if the government subsidized the farming of corn, which for this example assume is unprofitable. Then the economy will get used to those cheap prices and if/when the subsidiary is removed, could cause collapse in that industry.
Inflation
The first century emperor of Rome, Nero caused inflation by debating its currency. They replaced valuable silver coins with not a valuable copper coins. They continued this practice until the 4th century when wheat prices were over 2 million times higher than in the mid 2nd century. The corrupt governments debased their currencies over and over and by the 5th century Rome was finished.
Monet
Thanks for joining us on Intelligent Investing with Glenn Leest! Your go-to source for navigating the complex world of finance and becoming an intelligent investor. We appreciate your trust in us and your commitment to your own financial future.
Connect with Us:
Glenn Leest
Senior Investment Advisor
WT Wealth Management
Office Phone: (928) 225-2474 Office
Email: intelligentinvesting@wtwealthmanagement.com
Website: https://www.wtwealthmanagement.com/team/glenn-leest
Instagram: https://www.instagram.com/intelligentinvestingwithglenn/
Facebook: https://www.facebook.com/GlennLeestIntelligentInvesting/
YouTube: https://youtube.com/@IntelligentInvestingGlennLeest?si=d6S0y14lghz0eaHa
**Don't forget to subscribe, rate, and review our podcast on your favorite platform.
Your feedback helps us provide you with more valuable content.
We'll be back with more insights into intelligent investing and how it relates to your world.
Stay informed and make those smart financial choices.
Until next time, this is Intelligent Investing with Glenn Leest, helping you make your money work for you.
...
