9. What does the law of demand state?

The law of demand states that the higher the price of a product, the fewer people will demand that product, that is, demand for a product varies inversely with its price, all other factors remaining equal*.

10. What relationship does the law of demand describe? The law of demand expresses the relationship between prices and the quantity of goods and services that would be purchased at each and every price. In other words, the higher the price of a product, the lower the quantity demanded.

11. What non-price factors are covered by the “all other factors remaining equal” clause in the law of demand? Factors other than a good’s price which affect the The law of demand states that the higher the price of a product, the fewer people will demand that product, that is, demand for a product varies inversely with its price, all other factors remaining equal*. amount consumers are willing to buy are called the non-price determinants of demand. 12. Why does the law of demand have an inverse relationship? The law of demand states that the higher the price of a product, the fewer people will demand that product, that is, demand for a product varies inversely with its price, all other factors remaining equal

*13. What does demand schedule show? A demand schedule is a table showing the number of units of a product that would be purchased at various prices during a given period of time..

14. What is demand curve? The information presented in a graphic form is called a demand curve . Demand curve: the graphical representation of how demand for something varies in relation to its price.

15. What does the demand curve represent? It shows an inverse relationship between the price and the quantity demanded. Or to put it another way, the demand curve represents the quantities of a product or service which consumers are willing and able to buy at various prices, all non-price factors being equal. The demand curve slopes downward from left to right based on the law of demand. 16. What causes the demand for an economic product to increase or decrease at each and every price?

17. What is the difference between demand and quantity demanded? 18. What does a change in price lead to? 19. How does the price of goods or services affect the quantity that buyers demand? 20. How do factors other than a good’s price affect demand? 21. What is elasticity as an economic concept? 22. Why does elasticity vary among products? 23. Why does a price increase of a product discourage consumers to buy it? 24. When does a price change bring about only a slight change in the quantity demanded? 25. When does a price change cause a sharp change in the quantity demanded? 26. What goods are called necessities? 27. What does the price elasticity of demand mean? 28. What factors affect elasticity of demand? 29. What demand is considered as elastic? 30. What goods and services is demand elastic for? 31. When demand is said to be inelastic? 32. What goods and services is demand inelastic for? 33. Why is demand for necessities inelastic?

An Initial Look at Supply What do We Mean by Supply? The Law of Supply. Supply Curve Elasticity of Supply

1.What is the second key determinant of price?

supply is one of the two key determinants of price. The theory of supply explains the mechanisms by which prices and levels of production are set.

2.What does supply mean?

In economics, supply relates to the quantity of goods or services that a producer or a supplier is willing to bring into the market at a particular price in a given time period, all other things being equal. Supply: the total amount of a commodity available for purchase by consumers.

3.Whose behaviour is supply concerned with?

4.What does the law of supply state?

The law of supply states that the quantity of a commodity supplied varies directly with its price, all other factors that may determine supply remaining the same.

5.Why does the law of supply have a direct relationship?

The law of supply expresses the relationship between prices and the quantity of goods and services that sellers would offer for sale at each and every price. In other words, the higher the price of a product, the higher the quantity supplied. As the price of a commodity increases relative to price of all other goods, business enterprises switch resources and production from other goods to production of this commodity, increasing the quantity supplied.

6.Why is the law of supply the opposite to the law of demand? Clearly the law of supply is the opposite to the law of demand. Consumers want to pay as little as they can. They will buy more when there is a price decrease in the market. Sellers, on the other hand, want to charge as much as they can. They will be willing to make more and sell more as the price goes up. In this way they can maximize profits.