Demand and Supply

Front

What is the law of supply and demand?

Back

The law of supply and demand states that the price of a good or service is determined by the interaction of its supply and demand.

Front

Define market equilibrium.

Back

The point at which quantity demanded equals quantity supplied.

Front

What is the demand curve?

Back

The demand curve shows the quantity of a product demanded at different price levels.

Front

Explain the supply curve.

Back

The supply curve shows the quantity supplied at different price levels.

Front

What are some factors that affect supply and demand? Options: Currency exchange rates, political stability, inflation rates, trade policies; Seasonal trends, labor costs, technological obsolescence, consumer confidence; Weather conditions, advertising, transportation costs, production costs; Price, consumer preferences, income levels, population size, availability of resources, technological advancements, government regulations, and market competition.

Back

Price, consumer preferences, income levels, population size, availability of resources, technological advancements, government regulations, and market competition.

Front

How does an increase in price affect the quantity demanded?

Back

Quantity demanded decreases.

Front

What happens to the equilibrium price and quantity when demand increases?

Back

The equilibrium price and quantity both increase.

Front

How does a decrease in production costs affect the supply curve?

Back

The supply curve will shift to the right.

Front

What is the difference between a shift in demand and a movement along the demand curve?

Back

A shift in demand refers to a change in the entire demand curve, while a movement along the demand curve occurs due to a change in price.