Demand And Supply Of Resources In Australia †MyAssignmenthelp.com

Question: Discuss about the Demand And Supply Of Resources In Australia. Answer: Introduction Demand refers to the willingness of customers to buy a certain commodity at the existing rates. On the other hand, supply is the willingness of sellers to bring commodities into the market with the existing prices. The news article is about the Australian property market. The demand for property is high, with prices rising continuously. There is low property supply compared to demand. Prices for property are highly affected by the demand and supply patterns. High demand and low supply causes the price to rise.(Behravesh, 2014) The importance of demand and supply in property market is to determine how they affect property prices. The market should be able to satisfy the demand for property in the market. The market prices increase when the market demand is higher than the supply. The market should satisfy demand so as to maintain prices at acceptable levels. Investors and property buyers are the parties interested in this report. This informs on market prices and the influence of demand and supply on prices. Investors need to know the buying cost for properties. The aim of investors is to make profit; therefore, they need to know the property interest rates. This helps investors establish how much profit they will make from reselling the property. Property buyers need to know about the market demand to identify whether the products they need are available in the market at the prices that they can afford.(Kothari, 2004) Economic concepts and theories Demand and supply are the backbone of a market, as they determine the prices of the products. Demand is the willingness to buy at the existing market costs. The law of demand indicates that when the price of a commodity is high, then the customers demand less of the commodity, because the opportunity cost of buying the commodity is similarly high. The costly property force customers to reduce purchases. High demand for property in Australia caused by the large number of customers increase the cost of property in the market. Property sellers are not able to satisfy the demand for property in Australia causing the existing properties to sell at very high prices. The properties are sold at high prices with an aim of fetching high revenues from the few property brought to the market. High demand additionally increases prices in the market because the buyers are willing to buy property at the going price no matter how high they are. Customers find it difficult to buy a lot of property in this market because of the high prices, making the market inactive because it involves only a few rich individuals. Maintaining demand at equilibrium ensures that the customers do not pay too much for property or pay less for property.(Masulis, 1988) Supply is the quantity brought to market at certain price rates. The law of supply indicates that when the price for property is high, the suppliers bring more property to the market to earn extra revenue. When the supplies increase, the prices for products fall because of the need to dispose products quickly. The property market experiences a low supply of property. Low supply consequently results to high prices due to high demand. The effect of high prices in the market is scaring buyers who cannot afford the prices. The market thus becomes inactive with less customer. Supply forces correct the prices in the market by supplying at equilibrium point where the customers do not pay too much for commodities or less for the commodities. Suppliers should avail products in the market that satisfy the customers needs to avoid shortages.(Mordecai lee, 2012) Recommendations The property market should take steps that control the supply and demand of property. The market can control the prices of commodities. The market should consider increasing the prices for the areas that have low property supply. The market price increase attracts more suppliers in the market wanting to tap the additional revenues, in this way the supply of property is increased.(William Stallings, 2012) In addition to that, the market should focus on encouraging more individuals to buy property. This is by coming up with property policies such as low buying interests and then creating a good market environment that will ensure that the customers can sell the products later at high prices. Policies that ensure customers earn high profits at a short time form properties increase the demand for property in the market. Supply improvement is through making policies that do not charge high taxes on property sales revenue. High taxes scare dealers in property sales making them venture into other business opportunities, because they fear losing much income to taxes. The government thus, should focus on reducing taxes on property to stabilize both demand and supply. Taxes affect demand because high prices put of the buyers. The cause is the additional tax expense attached to the property price, therefore, tax reduction or elimination on properties increase the demand for product due to reduc ed prices. Supply increases because of low property sales tax and thus tend to sell more property.(Chalmers Brother, 2015) Conclusion Demand and supply forces affect property markets. These forces to a great extent affect the buying and selling of property in the market. The demand patterns are important in establishing the type of property that the people want, while supply assists in the availing of products in the market. The article helps to understand why property prices keep fluctuating as demand and supply forces take effect. Without demand and supply, the market fails to operate freely because monopolies set prices, which may exploit customers.(William Stallings, 2012) The Australian property market has tried to overcome the harmful forces of demand and supply by ensuring that the market operates at equilibrium. This is a point where demand and supply of property is equal. The market ensures that there are as many suppliers in the market to satisfy demand.(Robert J. Anderson, 2015) References Behravesh, N., 2014.Economics USA 8th edition. s.l.:W.W.Norton and Company. Chalmers Brother, V. K., 2015. Leadership Excellence. s.l.:New Possibilities Press. James Michael Stewart, M. C. G., 2015. Certified Information Systems Security Professional. s.l.:Sybex. Kothari, P. S., 2004. Corporate Accounting. Massachusetts: Sloan Management. Masulis, R., 1988. The debt/equity choice. Cambridge: Ballinger. Mordecai lee, G. N. S., 2012. The Practice of Government Public Relations.Economics s.l.:CRC Press. Robert , W. A. A., 2015. Mastering Leadership. Newyork: Wiley. William Stallings, T. C., 2012. Business Data Communication. s.l.:Pearson.