The Fundamentals of the market is that there are Demanders and Providers; the companies are demanders since they demand workers so as to operate. You are the provider when you work you arecurrently supplying your abilities both physical and psychological. The Law of Demand is the higher the price of something the lower the requirement will be. You can place it in your context let’s say your favorite group are the eagles and they are coming to your hometown in a ticket cost of 40 you may go and purchase 2 tickets for you and a friend but if the cost rises to 70 you then decide that you cannot purchase a ticket to your friend due to the cost increase and if the purchase price keeps rising then at a point you may choose not to attend.
That is a textbook example of the law of demand price increases and the Quantity demand goes down that is true for customers and for business’s because all of us have a restricted budget off course some have more income than others but no one has an infinite sum of money.It is Important for you to understand that you are a expense to your employer largely a labor cost, effectively speaking competitive companies work within an asset how much can you contribute to the company accountability how much do we need to pay you every week+ kind of employee type of employee means do you follow work ruleswhen your obligations are more than your resources you get fired. Well it has three options:
- Increase the purchase cost of the stuff they sell
- Make some full-time employees into part timers and
- Fire money to be saved by some people.
As it has been stated many times should you raise the purchase price of something less people will want to purchase it so if they raise the price depending on their merchandise elasticitythey will likely reduce money. The thing they are likely to do is make some people part timers and they will need to fire some people that will take place especially if this does not fix the issue.When People get jobless there are people making money that means consumer spending with this said demand goes down because there is money some companies continue to invest in money, occurring. Until they trim them enough and have the ability to make profits they continue to fire people.That is what occurs when you raise the Salário Mínimo 2020 the effects are still the same but on a smaller scale as it can absorb shocks.That is our buddy inflation.