Describe and explain the main functions of prices in a modern Essay

Describe and explain the main functions of prices in a modern competitive market economy PLUS MORE QUESTIONS - Essay Example This is a signal to the supplier to expand their production in order to meet higher demand. Further, in case of excess supply, price factor also plays an important role to eliminate the excess supply. The signalling function of price can be discussed more briefly by using the following diagram. It can be seen from the Figure-1, as demand for good-Q increases, supplier of the goods can earn higher revenue and profit by selling it at higher price per unit. Thus, increase in market demand leads to expansion of market supply. Further, Figure-2 shows an increase in market supply causes fall in the relative price of good-Q and expansion of the market output along with the market demand curve. By utilising the signalling function of price, consumers are able to transmit expression of the preference or important information about changing needs and wants, to its customers. When market demand is high, price acts as the motivational factor to increase production, as supplier can earn higher profit by increasing their production. Similarly, when demand is low, it signals suppliers to contract their production. In market mechanism, suppliers actually control their production on the basis of price fluctuation (Mas-Colell et al. 2004). Price also plays an important role to ration the scarce resources. It helps to allocate the scarce resources in an effective way, when demand in the market over strips the supply. When there is shortage of product in market, the price rises. Thus, only those people, whose willingness to pay is effectively high, purchases the product. It helps to eliminate consumers having low willingness to pay. In this context, it can be cited that, auction plays a crucial part to allocate resources in an appropriate manner and clears the market. In economics, the term demand increase reflects increase in the ability and willingness on the buyers to buy a good or services at pre-existing

Cellular Respiration and Photosynthesis Essay Example | Topics and Well Written Essays - 750 words

Cellular Respiration and Photosynthesis - Essay Example All organisms that are doing photosynthesis help all living organisms who depend on them for food and oxygen. In the chemical reactions in photosynthesis, carbon dioxide and water combine with the help of sunlight to produce glucose (C6H1206 ). The chemical equation of this chemical reaction is 6CO2 + 6H2O + light = C6H12O6 + 6O2. Carbon dioxide is absorbed and oxygen is released. Photosynthesis occurs in the chloroplasts of photosynthesizers. There are two stages taking place in photosynthesis. These stages are the light dependent reaction or light cycle and the light independent cycle or calvin cycle. The main function of photosynthesis is to produce food and capture energy. There are also processes involved in photosynthesis. These are the production of organic carbon, glucose and starch, form inorganic carbon, carbon dioxide, with the use of ATP and NADPH produced in the light dependent reaction. This process can be seen in plants, protista or algae and some bacteria in the prese nce of chlorophyll. Light is absolutely essential to produce this reaction. On the other hand, cellular respiration is the biochemical pathway wherein cells produce energy for the chemical bonds of food molecules in order to produce energy needed to sustain life. Cellular respiration should be done by all living cells whether it is aerobic respiration which is in the presence of oxygen or anaerobic respiration. In this process, glucose is broken down into water, carbon dioxide and energy. This breakdown of food occurs in the mitochondria which releases energy. There are 4 stages involved in cellular respiration, Glycolysis, pyruvate oxidation, Krebs cycle, and oxidative phosphorylation. Like photosynthesis, ATP is also produces in this process, occurs in all living organisms. Unlike in photosynthesis wherein sunlight is needed, cellular respiration happens all the time and no catalyst is required. Oxygen is absorbed through this process and carbon dioxide is released. In addition to this processes, energy should also be understood. So, what is energy? It is the ability to do work and make things move. According to the Law of Thermodynamics, energy can be changed but is not created or destroyed. Due the inefficiency of energy transformation, energy is lost when we do activities. This can be explained by second law of thermodynamics which says that energy is converted to heat. This means that molecules that provide chemical energy should be replaced whenever our bodies use chemical energy in cellular processes. ATP or adenosine triphosphate is also needed to be understood. ATP provides the energy needed for all biological processes. ATP is produced in the process of cellular respiration. ATP is constantly produced by our cells and consumes energy from organic molecules like glucose. When ATP is broken down, energy is released. This is the energy used in synthesizing organic molecule, pumping ions through the cell membrane and muscle contraction. This explains ho w energy from food is used. This process starts when large organic food molecules like starch and triglycerides are broken down into small biological molecules such as glucose and fatty acids. These fatty acids travels in the blood and functions as an input for cellular respiration which transfers energy into organic particles such as glucose to energy in ATP. Afterwards, ATP is used to provide energy for cellular