Explain how having knowledge of supply can be useful?

Question

In economics what are the benefits if you already have the know of supply of goods

Answer 1

If you know how the supply is going to come in you can sell a stream instead of selling goods on a one off basis.

For example if you are a fish company you can not go to a restaurant and offer them 2 halibut filets, 2 swordfish and 2 bass every day. You never know what you are going to catch.

But if you know that you can supply that demand you can sell them that same order every day, and lock them into an annual agreement.

Answer 2

One of the most fundamental concepts in all of economics is supply and demand. Why? Because market price is determined by the interaction between these two. Now some things effect or influence demand, while others impact supply.

For example, the cost of raw materials impacts supply. If a manufacturer can lower their costs, then they can make more for less. This lowers the market price, which benefits consumers.

Another example, let's suppose there are 10 suppliers selling the same item right now. 3 more enter the market. How does this benefit the consumer? Well there's now increased competition, which would lower the price.

The KEY to understanding supply is knowing which factors shift the curve outward and what results in movement along the curve itself.