Stock and Supply

Stock and Supply are two different terms in economics, mainly because of supply and demand. Stock is a fixed amount of goods that are held by sellers for any length of time, but not for sale. Supply represents all available goods to purchase throughout an economy at a specific point in time. Stock is how many items you have on hand to sell; Supply is how many items are out there for people to buy.  Inventory is counted as part of the supply if it can be sold under prevailing market conditions while stock cannot be sold until it has been reduced by selling some quantity through one or more transactions. This article will further explain the difference between stock and supply.

What is Stock?

Stock refers to goods that are stored or warehoused for future use. For example, if you own a restaurant and have some food you will not be able to sell until later on in the week, this food would be considered stock. 

Features of Stock

Stock includes all goods that are held by owners, producers or manufacturers. For example, in the restaurant example above, if you own the restaurant and you have to wash dishes before you can proceed to prepare food; You would have stock in that dishwashers are not readily available on the market. Stock is an economic term for all those goods that are stored or warehoused for future use. Stock is a long term investment of property that will be used for its immediate purpose. This is a very broad definition of stock and it is possible to have an inventory without being considered as having stock.

What is Supply?

Supply can be defined as how much of a product is currently available for sale. For example, if your store has three pairs of shoes available for sale and one person purchases one pair, then the supply of shoes left in your store will now equal two pairs.

Features of Supply

The supply of goods is the amount of goods specified at a specific point in time. Supply is the amount of stock that is available for sale at a specific point in time. The supply of goods includes inventory and all potential consumers who can purchase goods. Where stock is bought and sold on a particular day, supply represents all the goods that are available for purchase and/or sale at any moment in time. Supply is measured as the available quantities for future sales or purchases.

Why Stock and Supply are important ?

Investors think about stocks as risk-free wealth, but it’s important to understand that perception does not always match reality. Just like the rest of us, stocks are affected by the forces of supply and demand. When demand for a stock is high, it’s referred to as a bull market, while when demand is low it’s known as a bear market. There are also different types of stock. For example, common stock refers to shares in an incorporated company which holds assets and pays out profits on a regular basis to its shareholders. Preferred stock represents shares in an incorporated company which holds assets and pays dividends to its shareholders very often but not necessarily on a regular basis. The only difference between common and preferred stock is the payment of dividends.

Difference between Stock and Supply

1) Stock is a long term investment of property that will be used for its immediate purpose. This is a very broad definition of stock and it is possible to have an inventory without being considered as having stock.

2) Supply can be defined as how much of a product is currently available for sale. For example, if your store has three pairs of shoes available for sale and one person purchases one pair, then the supply of shoes left in your store will now equal two pairs.

3) Stock refers to goods that are stored or warehoused for future use. For example, if you own a restaurant and have some food you will not be able to sell until later on in the week, this food would be considered stock.

4) Supply is the amount of goods specified at a specific point in time. Supply is the amount of stock that is available for sale at a specific point in time. The supply of goods includes inventory and all potential consumers who can purchase goods. Where stock is bought and sold on a particular day, supply represents all the goods that are available for purchase and/or sale at any moment in time. Supply is measured as the available quantities for future sales or purchases.

5) Demand refers to how much of a product or service is purchased or sold at a certain price by consumers or businesses. Demand affects how many stocks or supplies there are of different products which influences prices and other things dependent upon the demand of those products.

Conclusion

Stock and supply are concepts that are valuable when thinking of a business as both profit and loss can be affected by the demand and supply of stock. In addition, understanding the relationship between stock and supply can enable you to make more educated decisions when purchasing goods or selling them in your business. Understanding stock and demand is valuable for all individuals whether they are a business, an investor, or merely a consumer.