A share is a loan you give the company to set up and perform their trading activities. When a company is first set up they raise their capital through shares. These shares entitles you to the ownership ( percentage of total shares equals percentage of ownership) of the company. One might wonder if a company has been operating privately for a few decades why would they start selling shares to the public. The answer is to raise more capital to expand, they might think of going global (e.g. Coca-cola) the amount of money available to a few individuals would be limited relative to the amount of money they can raise by selling shares to the public.
Once shares have been sold a board of directors are usually formed that makes decisions on the matters of the company, while this board does not necessarily run day to day operations of the business they do often appoint the CEO (Corporate Executive Officer) of the company, and s/he would then make operational decisions of the company. So ultimately just like a democracy each shareholder would have their say in running of the company, the only difference is the more money you invest the more influence and power over the decision making process and the bigger share of the profit you would receive.
Each share is paid a dividend each year (sometimes quarterly or bi-annually) this is a share of profit given to each shareholder of the company. Once the profit for the year is calculated after paying for all the expenses the board of the company decided on which proportion of the profits should be distributed among shareholders and the rest is usually re-invested into the company. Sometimes if the company makes a loss in that particular time dividends are not paid out , or the board might decide to still pay a dividend out of the company reserves.
A share appreciates in value depending on the amount of dividend paid and also the value of the company, so as a shareholder you get rewarded twice. Some share investors reinvest the dividends they get to buy more shares so they portfolio would be always growing, this is a good way to keep your money working for you !
It might be worth mentioning another type of shares a company might sell, this is called preference shares, shareholders of these share are not entitled to vote or have a right to get a varied rate of profit, but rather they are given a fixed amount of money on their return, and is treated more like a creditor to the company than a part owner.
While you always have the option of selling shares anytime you want a lot of investors believe that to grow a stable amount of wealth in the stock market you have to focus on companies that grow and are stable, this way you don’t have to keep trading your shares all the time, and on the long run you will see a significant growth in the amount you first invested.
The Supply curve is represented going upwards as price increases. As the price consumers are willing to pay for any goods or service increase, the quantity producers are willing to supply increases. The incentive for the suppliers are selling more goods at higher prices(therefore increasing profit). In this example the suppliers are willing to supply 200 quantity of x for the price of $20, but as the price increase there is a greater interest and therefore they are willing to supply 300 units of x for $25 ; 400 units of X for $ 50 and 500 units of x for $100.
