Macroeconomics Law of Supply and Demand

Law of Demand

The concept that there is an opposite relationship between prices for goods and services and the quantity the consumers are willing to purchase in a specific time

Opposite relationship

Law of demand showcases what kind of relationship between prices for goods and the quantity the consumers are willing to pay.

Prices for goods

the quantity the consumers are willing to purchase

Law of demand states that there is opposite relationship between what economic factors?

Downward sloping ; Inverse

Law of demand is illustrated in a ______________ sloping curve due to _____________ relationship of variables, say prices and quantity

Change in demand

an increase or decrease in the quantity demanded at each possible price

Change in quantity demanded

a movement between points along a stationary demand curve

increase in quantity demanded

Complete the cause and effect relationship:

Decrease in price will_________________

increase in demand

Complete the cause and effect relationship:

Change in non price determinant

will _________________

1.Number of Buyers

2.Tastes and Preferences

3.Income (normal good and inferior good)

4.Expectation of Buyers

5.Prices of Related Goods (Prices of related good and complementary good)

Enumerate the 5 non price determinants for demand

Law of supply

the concept that there is a positive relationship between prices for goods and services and the quantity the suppliers are willing to produce in a specific time

Positive

Law of supply states that there is __________ relationship between prices of goods and the quantity supplied.

upward sloping

Positive

Law of supply can be shown as an _______________ sloping curve due to __________ relationship of variables, say prices and quantity

Change in Supply

It is an increase or decrease in the quantity supplied at each possible price

Change in quantity supplied

a movement between points along a stationary supply curve

1.Number of Sellers

2.Technology

3.Resource Prices

4.Taxes and subsidies

5.Expectation of producers

6.Prices of other goods the firm could produce

Enumerate the 6 non price determinants of supply