A offer defines the quantity of specific products or services that a seller seeks to offer within the market at a certain price and time.
Every offer of a product includes the influence of various determinants, such as the production value, the technology, price and government policies and is governed by the Offer Law, which establishes a direct connection between price and offer of a product, although some of its characteristics remain the same.
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In this article you will find:
What are the characteristics of the offer?
Among the main features of the offer are the following:
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1. Product value
The fundamental determinant of the supply of a product is its price. This is because, depending on the increase in the price of a product, you can increase your offer and vice versa, while some other factors remain the same.
2. Value of related products
The different prices of the products that are complementary and substitute can become a great influence within the offer of a product.
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3. The offer is a desired quantity
Every offer indicates the amount that the company agrees to sell and not the amount that it actually sells.
4. Natural conditions
The offers of some products are directly influenced by weather conditions, such as This is the case of the offers of certain agricultural products that can increase when production is given to weather.
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5. Productive work
Workers who perform well in the development of production, can achieve significantly increase productive work.
6. Production techniques
The supply of products can also depend on the technique used to carry out the production. The techniques that are discontinued only allow low productions, therefore, they reduce the supply of the products much more.
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7. The offer of a basic product does not contain the total existence of products
This economic concept defines the amount that an organization is willing to incorporate into the market for a specific price to put it up for sale.
8. Tax policies
The fiscal policies of a government act as a regulating factor of supply. Should the tax rates pertaining to the products go up, the supply will go down, as the high rates that are imposed increase the overall production value. This could be an obstacle for suppliers to offer their products in the market.
9. Producer possibilities
Most companies are always looking for ways to increase profits, indicating that the objectives and expectations of a producer could affect the supply of a product.
10. Transport capacity
Optimal transportation facilities generate an increase in product supply as a result. However, transportation is a limitation mainly for the supply of products due to the fact that the goods are not available in the planned time due to transport facilities deficient.
11. The offer is expressed according to the price
In the same way as demand, the supply of a specific commodity always has a value, since, if a price change arises, the quantity of products offered may change accordingly shape.
12. Value of factors and their availability
The production of products will depend on the agents of production, such as raw material resources, the use of equipment and machines and the work of labor.
13. Government policies
A government is always changing its policies and programs, which can significantly impact supply.
Factors such as subsidies, when applied to companies, allow producers the possibility of produce more products and consequently increases the general supply of the product and also the quantity of demand.
14. Production value
Price influences the production of products to be offered to buyers, indicating that production value and supply are inversely proportional to each other.
15. The offer is related to the time period
The offer is the number of products that every company is willing to offer in a specific period of time that can be one day, one week, one month or even one year.
16. Optimal Technologies
The improvement in technologies, as well as the automation of production systems, can reduce the value of production, allow production to be much more efficient and carry out a correct expansion according to the capacity of the producers.
17. Industrial structuring
The offer of products may depend on the structuring of the industry where a company carries out the work.
If there is a monopoly in the industry, the manufacturer could restrict the supply of its products in order to allow the increase in prices of products and at the same time profits.
When talking about main characteristics of the offer, We must emphasize that this is directly related to demand, which allows a increase if the price rises when firms increase production to meet the increase in demand.
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