Considering supply in smart investment
The rise in demand for a product will generally lead to a rise in its price. However, this is not realistic when there is excessive supply. There are different types of supply: • Total Supply — the maximum amount of the product that can ever exist (over a year, month, or the product ’ s lifetime). It can be fixed or flexible, depending on the company ’ s policy. • Maximum Supply — the total amount the company allows to be released to the public (unrestricted and unreserved supply). • Circulating Supply — the amount that is already in the market and available for trading. Example – Product Alfa • Total Supply: 100 • Maximum Supply: 80 • Circulating Supply: 60 The difference between Total Supply and Maximum Supply is that the company may reserve part of the total supply (e.g., 20 units kept in its vault). The difference between Maximum Supply and Circulating Supply is that the company may hold back...