The supply polypole is a special form of polypole. Here the side of the offering companies predominates. However, there are only a few problems with the sale of the products, because the demand side is also very high. The supply polypole must be distinguished from the demand polypole and the bilateral polypole.
In this post you will get to know the supply spectrum. We’ll show you what the supply polypol is and what factors influence it. To distinguish it, we will introduce you to the polypole of demand and the bilateral polypole. To deepen your knowledge, you can answer a few exercise questions after the article.
- Delimitation: Demand polypol | bilateral polypole
- English: supply polypoly
Why should you know about the supply spectrum?
Each market is determined by the two components supply and demand. From these components the economy has developed three market forms and several sub-forms. The supply polypole is a sub-form of the polypole. When it comes to Polypol, many market participants meet many customers.
Many entrepreneurs appear on the food market, and their offers meet a broad demand. From an economic point of view, if the provider side predominates, there is a supply polypole.
How is the supply spectrum influenced?
Each market is influenced by the following factors:
- Disposable income of private households (income structure)
- Manufacturing costs of the company
- Political influence
Influencing factors: supply polypol
Household disposable income
According to deluxesurveillance.com, demand can only be generated if private households have the money to buy the products. Without disposable income, there would be no demand and, consequently, no polypole either.
The infrastructure is of particular importance for both the supplying side and the customer. If the providers benefit from a good infrastructure, they only have to make use of short delivery times. There are fewer costs because no cumbersome transport routes have to be taken into account. In addition, the company may apply to the production achieve a higher output produce the goods therefore in a higher quantity and and offers on the market. If the supply exceeds the demand, the precondition for a supply polypole is created.
A market can only create many customers if the conditions are optimal. This also includes a good infrastructure. If a consumer has to accept cumbersome journeys to buy a product, he may decide against buying it. If, on the other hand, he only needs a little time to calculate for the journey, this could have a positive effect on the motivation. A good infrastructure is therefore a prerequisite for a supply polypol.
Manufacturing costs of the company
The production costs play a decisive role in calculating the sales price. Because every company wants to make a profit with the sale of its products. A company first calculates the production costs and a profit mark-up. The company determines the sales price on this basis. If the company can offer the product at a low price, the demand side increases.
In a free market economy, the relationship between supply and demand regulates itself. If the economy is in a recession, however, the state must take measures to stimulate the economy again. These include B. the lowering of the key interest rate, which is carried out by the European Central Bank.
The lowering of the key interest rate means that companies can benefit from better conditions when taking out loans. This leads companies to invest and produce more. If there is a large number of buyers in the offer of the entrepreneur, the economy speaks of a supply polypole. Another way of exerting political influence is to lower VAT rates.
Depending on how the various factors develop, the market form results in a supply polypole if the side of the supplying company exceeds the number of consumers.
Delimitation: demand polypole and bilateral polypole
The following two market types can be distinguished from the supply polypol:
- Demand polypol
- Bilateral polypole
When there is a polypole of demand, many buyers meet many providers. Because the side of the consumer predominates, there is a demand polypole.
With a bilateral polypole, many suppliers can sell their products to many buyers. The national economy describes this market form as a perfect market, because all products are sold and the needs of the customer are fully satisfied.