By offer one generally understands the quantity of each kind in the political economy about property or achievement, which is an individual economical participant or a majority from participants to a certain price in the exchange against money or other goods and achievements to give interested and ready.

This primary definition of offer presupposes the conception of the homogeneity of the property regarded in each case, since only so by different quantities of a property the speech can be and be summarized only so the offer of different participants quantitatively and in the inquired quality can. In derived a sense one speaks also from the aggregated (summarized) offer of different goods for instance a whole branch of industry or the entire national economy, which is determined as sum of the concerning the price evaluated offer of the individual goods. Accordingly this in such a way determined aggregated offer assigned price is determined as average price weighted with the given offer structure.

Economiceconomics statement

In the economic science one usually assumes - ceteris paribus - a systematic connection between the prices and the offered goods quantities exists. This connection is represented in offer functions or offer curves, which assign the goods quantity to each offered with this price price. It is generally accepted that with rising price the offer increases, the offer curves run thus rising (law of the offer). While a rising process of the offer curves for the goods offer of an enterprise can be deduced with suitable acceptance (in particular the acceptance of sinking scale yields) from the neoclassical theory of the enterprise, the rising offer at factors of production (like e.g. work) does not follow from the neoclassical theory of the households. Whether a work offer falling with the wages can be e.g. observed also empirically, is disputed.

Economic analysis of the offer term

With the economic analysis it is to be noted that with rising aggregation degree (i.e. the more individual participants and individual goods to be summarized), which becomes ever more problematic ceteris paribus clause, since evenly any longer cannot be assumed remaining circumstances (income, offer structure) of in an aggregated offer function or - circle changes of representable to remain unaffected by prices and offer quantities. This difficulty go around models of a general equilibrium.

For individual goods one differentiates the individual offer of a property by an individual participant from the total offer, which is determined by the addition of the offer of all offerers of the appropriate property.

Offer and price theory

In the neoclassical price theory it is accepted that under competitive conditions (partialanalytisch) the current price of a property is determined by the interface of the total offer and total demand curve for this property. In the general equilibrium analysis the prices of all goods are determined by simultaneous equating of the total offer and the total demand on all markets.

Related links

• Theory of supply and demand

Articles in category "Offer (political economy)"

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