Learn The Eternal Law Of Supply And Demand from ‘Investment Biker’ Jim Rogers

Learn The Eternal Law Of Supply And Demand from 'Investment Biker' Jim Rogers | Supply Chain Management | Emeritus

While at first glance, investor financial commentator and author James Beeland Rogers Jr.’s book, Investment Biker: Around the World by Jim Rogers, may look like a travelog. It is a rich resource for Jim’s critical views on the effects of a country’s cultural, political, financial, and geographical aspects on its people, society, and markets. A country’s economic history may shed light on its present state since it allows readers to follow the natural progression of events. When looking for a place to deposit her hard-earned money, an investor will unavoidably examine every available piece of data. The dedication that Jim put into writing Investment Biker: Around the World by Jim Rogers is clear from cover to cover. The book talks about the law of supply and demand.

What Applications Can the Law of Supply and Demand Have?

The rule of supply and demand is a fundamental economic principle that describes the dynamic relationship between supply and demand. And their mutual pursuit of a stable market price. When there is an overabundance of supply relative to the demand for the items on the market, prices tend to fall. A wide range of variables affects the equilibrium between supply and demand. Both supply and demand may increase or decrease for many causes. Almost every tenet of economics can be traced back to the rule of supply and demand.

What Does Jim Roger Say?

It would be best to be cautious when you’ve invested in something, done your homework, gained profit, and decided to sell it. Jim Rogers says:

Right at this moment is a precarious period. It is risky because you get the impression that you are heated. You have reached the point when you believe that you have mastered the art of investing and that it is a simple game. Now is the time to throw up the drapes, gaze out the window, take a trip to the beach, or do anything else other than worry about the stock market or investment because, at this moment, you are more susceptible to harm than ever before. 

Also Read: What are the Roles and Responsibilities of a Supply Chain Analyst

4 Supply and Demand Laws 

The law of supply and demand states that there are four conditions under which changes in supply or demand will cause prices to shift:

When supplies rise and demand stays the same, prices fall

Suppliers sometimes reduce prices to stimulate demand for products nearing or exceeding their expiry dates by moving surplus inventory.law of supply and demand When supply rises, but demand stays the same, a surplus results. There are numerous possible explanations for this, including increased production.

When supply drops, and demand stays the same, prices go up

Supply shortages have several causes, including blunders in the supply chain. Shortages develop when supply levels diminish. Consumers are more likely to pay a premium for in-demand items and services when supply is limited. Once the supply is restored, prices usually return to where they were before the issue arose if the disruption was transitory.

If demand drops and supply stays the same, price drops will occur

With no shift in supply, a surplus may also result from decreased demand for a product or service. Ultimately, the same result occurs at cheaper costs.

With an increase in demand and no change in supply, prices are expected to climb

It is possible for there to be a shortage if the demand increases but the output does not match or if production needs to catch up to the growing need. Prices often remain stable when there is an equilibrium between supply and demand.

Supply and Demand Curves

A demand curve shows the amount of a product customers purchase at various price points. Consumers’ willingness to purchase a given quantity of a good or service declines in response to a rise in price. When prices rise, fewer people will buy such things. At other times, buyers might rather spend their money on a different set of comparatively less expensive items. For the simple reason that everyone has finite means.

In a similar vein, a supply curve plots out how many units of product suppliers will crank out at different asking prices. The quantity available decreases as the price goes down. The market is in equilibrium when the demand and supply curves meet at a single price at which both the amount requested and the quantity supplied are equal. This is the law of supply and demand.

Conclusion

Even though the roots of the rule of supply and demand date back hundreds of years, it is still a subject regularly discussed and employed in contemporary debates and theories of economics. The theory has evolved to account for contemporary technological and economic developments. Still, the core concepts behind the theory have remained relatively unchanged for the most part.

Enhance your career today by signing up for professional courses only on Emeritus. You can also enroll in supply chain analytics and management courses in order to make business decisions through structured insights into supply chain management.

About the Author

Content Marketing Manager, Emeritus Blog
Manasa is the content ninja that every brand needs. Apart from being an expert in tech-related trends and digital marketing, she has found her calling in edtech. Her 10-year-long tryst with education started with a teaching fellowship for underprivileged children, followed by a stint as an edupreneur. It gave her the perspective she now uses to create impactful content for Emeritus. Manasa loves the life of a digital nomad that allows her to travel and hopes her reels go viral on the Gram.
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