Demand Supply Curve of a Basic Need Commodity

Abstract

The Demand Supply theory does not differentiate between the commodities which are essentially required by the people and the commodities which are luxury items affordable by only a select class of people. A typical demand supply curve also does not differentiate between needs and wants and is much influenced by the marketing strategies. A typical demand supply curve is a theoretical concept of a free market situation when there are only wants and needs have already been met. The demand supply dynamics for basic need goods is quite different and the supply or availability of the essential needs of the people can’t be left to the vagaries of the market forces. The demand (need) is limited and supply has to be there to meet this need. The government has to intervene to ensure the fulfillment of the basic needs of the people.