Econ supply and demand test

Define Law of Demand

Inverse relationship between price and quantity

When price goes up, quantity demanded goes down, when price goes down, quantity demanded goes up

Define Law of supply

Direct relationship

When price goes up, quantity supplied increases, when price falls, quantity suppled fall

Define Quantity demanded

The amount people are willing and able to purchase at a specific price durning a specific period of time

Define demand

The relationship between the quantity demanded and the price of a good when all other influences on buying plans remain the same

Define supply

The relationship between quantity supplied and the price of a good when all other influences on selling plans remain the same

Define Quantity supplied

The amount that people are willing and able to sell during a specified period of time at a specified price

what are the factors impacting demand

Factors impacting Demand: 

• Prices of related goods (complements and substitutes)

• Expected future prices

• Income (normal and inferior) 

• Expected future income

• Number of buyers

• Preferences 

what are the factors impacting supply

i. Factors impacting supply: 

• Prices of related goods (substitutes and complements)

• Prices of factors of production and other inputs (taxes and subsidies) 

• Expected future prices

• Number of sellers

• Productivity (technology and natural events)