Law of Demand
Iyman almaliki Homework 2 MBA FEMALE SECTION
Question 1 page 93 • Law of Demand ▪ As price increases, the quantity of the product demanded decreases, and as price decreases, and the quantity demanded increases - an inverse relationship exists between the price and the quantity demanded. • Law of Supply ▪ As price increases, the quantity of a good or service a supplier is willing to offer will increase, and as price decreases, the quantity supplied will decrease – a direct relationship exists between price and quantity supplied. • Demand curve ▪ The downward –sloping demand curve illustrates the law of demand, showing that Zach demands fewer bagels at higher piece and more bagels at lower prices. [pic]
• Supply curve • The upward-sloping supply curve illustrates the law of supply, showing that more is supplied at higher prices and less is supplied at lower prices [pic]
• Factors Influencing Demand ▪ Taste, fashion, and popularity. ▪ Buyers’ incomes. ▪ Buyers’ expectations concerning future income, prices, or availabilities. ▪ Prices of goods related as substitutes and compliments. ▪ The number of buyers in the market. • Factors Influencing Supply ▪ The cost of producing an item. ▪ Expectations about future market conditions. ▪ Other items the seller does, or could supply. ▪ The number of sellers in a market.
Question 2 page 93
|Examples |Result |Graph change | Chang in equilibrium |Change in equilibrium |
| | | |price |quantity |
|A decrease in the number of builder in |Decrease in supply |Supply curve shift |Increase |Decrease |
|housing market |
Question 1 page 93 • Law of Demand ▪ As price increases, the quantity of the product demanded decreases, and as price decreases, and the quantity demanded increases - an inverse relationship exists between the price and the quantity demanded. • Law of Supply ▪ As price increases, the quantity of a good or service a supplier is willing to offer will increase, and as price decreases, the quantity supplied will decrease – a direct relationship exists between price and quantity supplied. • Demand curve ▪ The downward –sloping demand curve illustrates the law of demand, showing that Zach demands fewer bagels at higher piece and more bagels at lower prices. [pic]
• Supply curve • The upward-sloping supply curve illustrates the law of supply, showing that more is supplied at higher prices and less is supplied at lower prices [pic]
• Factors Influencing Demand ▪ Taste, fashion, and popularity. ▪ Buyers’ incomes. ▪ Buyers’ expectations concerning future income, prices, or availabilities. ▪ Prices of goods related as substitutes and compliments. ▪ The number of buyers in the market. • Factors Influencing Supply ▪ The cost of producing an item. ▪ Expectations about future market conditions. ▪ Other items the seller does, or could supply. ▪ The number of sellers in a market.
Question 2 page 93
|Examples |Result |Graph change | Chang in equilibrium |Change in equilibrium |
| | | |price |quantity |
|A decrease in the number of builder in |Decrease in supply |Supply curve shift |Increase |Decrease |
|housing market |