Economics is regarded as the discipline that can be defined in various manner. It is regarded as the study of scarcity. Along with this it includes the manner in which the individual make use of resources or the study which is relating with decision making. In other words it can be referred to as the theories, principles and models that are dealing with the manner in which the procedure of market is working (Kolstad, 2011). In addition to this it is making an attempt towards explaining how individual makes allocation of scarce resources and possess several alternatives and other matters that can increase dealings with wants of human and their satisfaction. The present investigation includes usage of supply and demand analysis in determination of price of lead. Further it covers negative externalities that rise because of excessive consumption of saturated food fat by certain people.
(i) Use of supply and demand analysis in determination of price of lead
Demand and supply is regarded as the most fundamental concepts Economics of the economics. It is considered as the backbone of market economy. Demand is referred as the quantity of the products and services which the buyers desires (Lee and Lemieuxa, 2010). The quantity demanded is regarded as the amount of product that people are willing to purchase at some price. The association among the price and quantity demanded is referred as demand relationship. The demand curve is sloping downward. It is being stated in the law of demand that higher is the price, the less quantity of the product is demanded.
In contrast to this supply reflects the quantity which market can offer. The quantity that is being supplied is regarded as the amount of some good producers desires to make supply while receiving some price. The curve of supply is upward sloping. It is being stated by the law of supply that higher is the price the greater quantity of the product is supplied (Nagurney, 2013). The correlation that exists among the price and the amount of the goods and services which needs to be supplied within the market is referred to as supply relationship. Price is considered as the reflection of supply as well as demand. The association among demand and supply presents the forces beside the allocation of resources. Within the market economy theories, demand and supply theory would make allocation of the resources in the most effective manner.
The law of demand
This states that if all the factors are equal, with the increase in price of good, less number of people would demand for the particular good. In other sense it implies that higher prices means lower quantity is demanded. The amount of the commodity that is being purchased is less at higher prices due to the reason that prices goes up and also the opportunity cost of buying the particular commodity. Because of this people would avoid purchasing which would force them in forgoing the consumption of something that is being valued more.
The law of supply
It reflects the quantity that is being sold at some price. However unlike the demand law, the supply relationship reflects an upward slope. Such implies that higher the price the higher would be quantity supplied (Newbold, Carlson and Thorne, 2012). Producers would make supply of more at higher prices as selling greater quantity at high price can lead to increasing the revenue for the firm.
Supply and demand are regarded as the economic model related with the price determination within the market. It offers that within competitive business environment, the unit price of specific commodity would differ till it settles at a point wherein the quantity demanded is equal to the supplied quantity by the producer. This leads to economic equilibrium of the price as well as quantity (Norsker and et. al., 2011). It has been assessed that the law of demand and supply includes four basics. This presents that in case demand increases and there is no change in the supply then this results in increasing the equilibrium price and greater quantity. Further when demand decreases and there is no change in supply then such results in lowering equilibrium price and low quantity. Another basic presents that in case there is no change in the demand and supply increases then such results in lowering the price of equilibrium as well as greater quantity. Moreover in situation there is no change within the demand and supply decreases then such results in increasing equilibrium price and lowers the quantity.
The pricing that is demand oriented focus on the nature of the demand curve for the product or the service that is being priced. The nature of the demand curve to large extent is affected by the structure if the industry wherein the company is operating. Because of this firm is operating within the industry that is highly competitive. Further price can be considered as strategic advantage in attaining as well as maintaining the market share. In contrast to this in case business is operating in the environment where there is presence of few dominant players, the range wherein the price varying price is minimum (Pigou, 2013). Changes in the supply and demand can be long or short run in nature. Weather tends at affecting the prices within the market in short run course of time. Along with this alteration in the preferences of the consumers can have short or long run impact on the prices that depends on the goods as well as services. As the seller alters the price requested at lower level the service and product may become attractive use of financial resources to the large number of buyers (McBride, 2017). Thus such demonstrates expansion of the total market for the item. Such total market demand for all the buyers for product type is referred as primary demand. In addition to this a lower price can result in buyer doing shift in the purchase from the competitors by making assumption that competitors can meet the lower prices. In case the demand does not expand as well as competitors meet the lower price the result would be lowering of the total revenue for all the sellers. It is being assumed that customers is consider rational decision maker and possess perfect information. Thus in case price of specific product goes up and customer has greater awareness regarding all the relevant information then demand for the product reduces.
Both demand and supply always plays a important role in price determination of any goods and product. A producer fixes up the price according to need of market and also sales it items according to market needs (Schumacher, 2011). The price is determined by the producer with help of equilibrium level. The market always set at that point where demand and supply meets. Price is totally depend upon on both of these terms components. It represents willingness of consumer to purchase and also constructor for selling. The understand of this concept become more easy with the help of following terms:
Equilibrium price level: In this stage, when both the curves of demand and supply get intersect each other at same point then manufacturer set price according to curve. This is treated as best condition for setting up cost (Tietenberg and Lewis, 2016). It is treated as effective point for both because at this stage seller do not suffer any loss and profit. It satisfy both buyer as well as seller. So, a market price is always not a fair price for consumer and maker. In some cases, originator get suffered and sometimes procurer get suffered.
Change in equilibrium price: Sometimes, the change in price scenario occurs. In this situation, may be the demand curve get shifted or may be the supply curve get shifted or movement takes place. Both these things can happen due to change in price or change in quantity supply. So, when demand curve get move it means movement in supply curve also takes place. In this case, if price got increases supply got decreases and if price of a commodity decreases a market supply of that good gets increases. So, this situation can only be occur because changes in customer preference taking place. These changes affects the price elasticity of demand.
Now if there is any kind of shift occur in supply curve its only because of changes in price. A decline change made the curve to shift inward left. An inward shift causes that there is a fall in price and also its quantity get decline.
Market prices are totally depend upon on the interaction of demand and supply. When both of them get meets them price determination situations arises. An equilibrium level maintain balance between demand and supply factors (Williams and Laurens, 2010). So, it is a best situation when seller have to fix the price and neither he got any loss nor any kind of gain. It plays as a satisfactory point.
(ii) Negative externalities which arises from the consumption of saturated food
Saturated food are those which have double molecules of carbon and hydrogen. These items increases the cholesterol quantity in the blood and and affects directly on health. These goods are remain solid at the room temperature some examples are butter, beef and dairy products. Proper alternatives have to be used top remove these health infectious habit like vegetables, food, grains etc.
The negative aspects which are related to this is it may causes many diseases which increases the cost of hospital, medicines etc. so by stop using these saturated food items the health of any person can become stable and fit. Sometimes these products are generally sold by shopkeeper after their expiry so, it is also a wrong. For example if the quantity of cholesterol in blood increases the chances of getting heart attacks increases and that not only affects health and harm an individual but also affects hospitality cost and many more things (Angrist and Pischke, 2010). So, for this health related issues an individual have to understand these problems so that they can make a increment in their life age. This saturated food also decreases the age of many people. Because those people are become addicted for the these items.
So, these items increases the weight of an individual and that weight lead to many problems. In modern world many people are like to eat these goods specially children. So, there weight become more as compared to other kids which are of their own age. And also these items not gives proper nutrition in an individual. Lack of nutrition leads diseases like depression, hypertension and so on. And these saturated food items have high quantity of sugar in them which leads diabetes in very early age.
So, government have to adopt some special steps through which the consumer get aware about all these things and start to consume less of these type of goods (Barnett and Morse, 2013). Some of the steps are written below:
Consumer awareness: authority have to maintain a consumer awareness programs so that individual can get well informed about all these crises. So, that they will become a good consumer and well informed about these activities and adopt some activities which are favorable for them.
Availability of substitute goods: Government have to make the substitutes of these items so if people want to eat that particular goods they can consume it very well and also not affects the health (Horton and Chilton, 2010).
Government policies: Policies which are in favor of wide range of customer. Government have to make some rules and regulation an welfare. They have to bound those organization which are producing these high quality infectious product. Also, they have to reduces the risks which are related to those products. If, any of the organization will not going to follow, authority have to cancel their license and maintain good and friendly market which are going to do those activities which are for customer (Becker, 2010).
Proper information: the government have to adopt those procedure through which they can gave full information of that product to customer. If, proper information is going to conduct consumer become more aware and may be start declining in consumption of these goods more.
Banned on advertising junk food: the government have to make a law in which the advertisement of junk food get banned. If, they are not going to telecast any more on television or any other places, large variety of consumer not get attracted towards them. And it declines the health related issues (Jackson and Senker, 2011).
Saturated fatty refer to the fatty acid group in which all the foods which have higher carbon and hydrogen molecules and those molecules directly affecting the human heart. It also creates problem in pumping blood because heart control all activities of a body. Some examples of saturated food are coconut, butter and chocolate. These things have higher rate of hydrogen and it s not suitable for a body. Some saturated items have higher sugar ingredients included in them. And also creates a critical disease in them. These items have lack of vitamins and nutrition in them. This leads to create a higher metabolism in an individual body (Borch, 2015).
Fat is necessary for body but this fat is also of two types: good fat and bad fat. Bad fat affects on body whereas good fat increases energy level for doing work. Bad fats creates fat and increases the chances of damage of an individual heart and mind. Bad fat restricts an individual to work with same energy and also diminishes the working capacity.
So, by all these it s concluded that by more consumption of saturated food the level of fat rises. By this rising level of fat the cholastrol quantity increases this increment directly pay attention by affecting on heart. If heart get affected the rate of heart attacks increases and this increases cost of hospitals and then it also increases the funeral cost and mortgage cost. Also by more consumption there is large quantity of sugar also this sugar level built a diseases name diabetes. Diabetes directly affects health and also on blood. And it increases the cost of hospital again.
By more consumption of these types of food, the death rate from last few years also rises. And age rate also getting affect by this (de Bekkerâ€Grob and et. al., 2012). Modern children are become fatty day by day and that also leads to increase their health inefficiency. Saturated food are high in calories and these calories leads to high weight which leads more as a diseases of depression. And the rate of depression also increases the case of suicide very year.
Not only government have a duty towards society. Society also have to pay attention towards them by using less of saturated food and less consumption made them fit and healthy which decreases the death rate and funeral cost every year. Also it helps in declining the depression suicide case every year. So, by adopting some small changes make not only a individual happy but also makes their body happy.
Saturated food contains some animal sources like butter or red meat which contains the fat in body. Some of the drawbacks of this food are it is harmful for heart disease patients. The eating of these kind of food level of cholesterol in bloodstream (Edenhofer and et. al., 2010). If there is too much cholesterol in our body it can lead to the clogged arteries and which increase the level of risk in developing the heart problems. Other drawback is cancer, the high level of saturated foods can develop the cancer in breast, prostate and colon. If the women is consuming more facts from the red meats then it can increase the risk of breast cancer in their body. As well as it also increase the risk of prostate and colon cancer while taking the consumption of animal meet (Etzioni, 2010). In contrary obesity increase the level of risk to those people who are suffering from the health issues such as diabetes, cardiovascular and many more. There are many factors which can cause the obesity through the taking of saturated foods. The people have to understand the difference between the good and bad food so that these kind of food does not create the health issues.
In modern era, some of the organization in food industry use the saturated oils in products which contains the animal fats and harm the health of the public. This food is harmful rather than it give the advantage to our health. The company should use fresh saturated food which is possible to avoid the health issues. The over consumption of the food lead the bad lipids which can increase the risk in life related to the health issues (Fortin, Lemieux and Firpo, 2011). If these food are consumed at right time then good nutrient help to perform the functions properly. In daily life, the people consumes more than 10% saturated food which increase the health problems. While using the unsaturated food it can eliminates the fats and diet from our daily life. The people have to eat recommended food that meets the essential nutrient of our body. When the people are consuming these food then they have to considered about their disadvantages and advantages also (Frey and Stutzer, 2010).
From the report it can be concluded that the producer have to set the prices of products and services according to the demand and supply. Along with this change in equilibrium price take place when there is more or less demand of the product is there. The firm has to provide the products which are highly in demand and can maximise their profits. When the firm are taking decision to set the prices of products then they have to considered the market condition to determine the prices. The people does not consume so much saturated food due to this are facing many health issues. There are some drawbacks of this food which are facing all those people who are consuming these foods. The government has to adopt proper policies which could reduce the risk regarding these products.
- Angrist, J.D and Pischke, J.S., 2010. The credibility revolution in empirical economics: How better research design is taking the con out of econometrics. The Journal of economic perspectives. 24(2). pp.3-30.
- Barnett, H.J and Morse, C., 2013.Scarcity and growth: the economics of natural resource availability (Vol. 3). Routledge.
- Becker, G.S., 2010. The economics of discrimination. University of Chicago press.
- Borch, K.H., 2015. The Economics of Uncertainty. (PSME-2) (Vol. 2). Princeton University Press.
- de Bekkerâ€Grob, and et. al., 2012. Discrete choice experiments in health economics: a review of the literature. Health economics. 21(2). pp.145-172.
- Edenhofer, O., and et. al., 2010. The economics of low stabilization: model comparison of mitigation strategies and costs. The Energy Journal. pp.11-48.