When people hear about economics, they get either frightened or excited. Most people think that the science of economics has to do with money. Tell someone you are in the economics industry, and they will ask you what stock they should invest in.
However, most people don’t realize that economics has to do with money indirectly because the subject of this science is essentially decision-making. Today you will learn why you should study economics and how even basic knowledge can improve your understanding of the markets.
BASIC ECONOMICS
Since you are primarily a salesperson, you can’t be a professional in economics. Sometimes economics involves complex mathematics, and that is because economics is a science.
But if you consider it a field that studies human behavior, economics is also an art. As a salesperson, you don’t have to go as deep as performing complex mathematic equations. Still, you can study the surface of economics and get comfortable with basic concepts such as supply and demand, prices, value, etc.
EXAMPLE: SUPPLY AND DEMAND
Thankfully, many resources allow us to study fundamental economic principles without being mathematic genius. Let’s use supply and demand as an example.
The supply of a product or service is how much is available for purchase at a given price. The law of supply says that as the price of a product increases, companies will build more of the product because that may bring in more profits.
On the other hand, the demand for a product or service is the amount people want to buy at a given price. Therefore, the law of demand states that as the price of a product increases, the less of that product people will want to buy.
Both supply and demand have the power to affect prices, and there are four basic laws on how these concepts interconnect with pricing.
1- If the supply increases, but the demand stays the same, the price will go down.
2 - If the supply decreases, but the demand stays the same, the price will go up.
3 - If the supply remains the same, but the demand increases, the price will go up.
4 - If the supply stays the same, but the demand decreases, the price will go down.
ECONOMICS DOESN’T HAVE TO BE A STRAIN
As you can see, economics explains the correlation of different concepts with the markets. Essentially, these relationships affect how people behave, but the way people behave also affects the markets. So, for instance, the demand for various products or services can increase if people have more money.
These interconnections have been presented by people that do the math for you. Economics is an art and a science that can offer valuable insights to salespeople, or rather the ability to create new insights. Of course, everything requires time and energy to learn, but economics is not a subject to ignore.
