Page 44 - DECO405_MANAGERIAL_ECONOMICS

Mine
2287
2063
2234
2159
2133
1908
2257
2464
2273
2278
production
Official sector
434
-
406
198
81
173
275
111
622
464
sales
Old gold
530
611
394
393
615
623
640
480
487
574
Scrap
Gold Loans
5
164
78
-
Forward sales
115
30
126
466
329
96
156
158
222
215
Option
15
7
63
92
101
103
57
18
hedging 1988 1989 - 1990 1991 - 1992 - 1993 - - 1994 1995 - - 1996 1997 -
Implied 91 2 - 304 - - 173 - 108 260
disinvestment
Total supply 2746 3085 3095 3166 3602 3541 3362 3627 3510 4254
fabrication
Jewellery 1645 2039 2188 2358 2760 2553 2615 2790 2837 Unit 3: Market Supply and Equilibrium
3328
Electronics 207 209 216 205 176 180 191 206 211 237
Official coil 130 141 123 143 93 117 80 84 63 99
(sales)
Notes
Others 147 152 156 162 178 187 194 210 212 226
Total 2130 2541 2683 2868 3208 3037 3079 3280 3322 3890
fabrication
Bar Hoarding 461 530 224 252 282 162 231 306 182 337
Official sector 155 - - - - - - - - -
purchases
Gold loans - - - 45 85 65 52 23 5 28
Forward sales - - - - - - - - - -
Option - 15 - - - 35 - - - -
hedging
Implied - - 188 - 27 242 - 17 - -
investment
Total demand 2746 3085 3095 3166 3602 3541 3362 3627 3510 4254
Gold Price 436.87 380.79 383.59 362.26 343.95 359.82 384.15 384.05 387.87 331.29
(PM fix,$/oz)

Question
Analyse the effect of demand and supply on the price of gold with the help of demand
supply curves.
3.3 Summary
Supply is the specific quantity of output that the producers are willing and able to make
available to consumers at a particular price over a given period of time.
According to the Law of Supply, more of a good will be supplied the higher its price, other
things constant or less of a good will be supplied the lower its price, other things remaining
constant.
Price is determined by the two forces of demand and supply, in a free market. A point of
balance, where demand equals supply is known as market equilibrium.
3.4 Keywords
Equilibrium: A state of balance.
Law of Supply: More of a good will be supplied the higher its price and vice-versa
Supply: Willingness and ability to produce a specific quantity of output available to consumers
at a particular price over a given period of time.
3.5 Self Assessment
1. State true or false for the following statements:
(a) Supply is a positive function of price.
(b) A trader has 10 bags of cement in his store. This represents supply of cement.
(c) A supply schedule is a table that represents the various amounts of goods available
for supply at various prices.
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