Offer


According to its etymology, the word offer comes from the Latin “offerre” which means (things that are offered). This term is frequently used in the economic context to define the quantity of goods or services that manufacturers are ready to sell, within certain market conditions. When conditions are characterized by price, it is when the supply curve is formed, which consists of the union of market prices and supply. The law of supply stipulates that the higher the price of a product, the greater the supply.

Within the economic market, there are two fundamental elements that sustain it, these are supply and demand. The relationship of a product with its sales, within a perfectly competitive market, will lead the market price to reach an equilibrium point, where market exhaustion will be generated, that is, all products will be sold and demand will be satisfied. The principle of supply and demand implies three laws: 1) with a fixed price, demand exceeds supply, causing the price to increase and vice versa, when supply exceeds demand, the price decreases. 2) an increase in price decreases demand and increases supply or vice versa, a decrease in price increases demand and decreases supply. 3) The price is located at the level where demand balances supply.

The supply curve shows us the relationship that exists between the price of a product and the proportion offered of it, the slope of the curve reflects the way in which the supply increases and decreases, compared to a decrease or increase in price.

Within the market economy there are several types of supply, among them are: Competitive supply, is one where those who produce and market a good or service are in conditions of free competition. Oligopolistic offer, characterized in that the market is dominated by a few producers and service providers, and they are the ones who set the offer and prices, this occurs thanks to the fact that they keep most of the inputs for their activity hoarded.

Monopolistic offer, is one where a single producer is the one that dominates the market and is the one that sets price and quantity.

The supply will be affected by the following elements: The price of the good in the market, the cost of the factors required for such production, competition, technology and government regulations.