Economics: Supply and Demand 2

What is the Law of Demand?

• The Law of Demand states that as the price of a good increases, the quantity demanded also increases.

• The Law of Demand states that as the price of a good decreases, the quantity demanded decreases.

• The Law of Demand states that the quantity demanded remains constant regardless of price changes.

• The Law of Demand states that, all else being equal, as the price of a good or service increases, the quantity demanded decreases, and vice versa.

Explain the Law of Supply.

• The Law of Supply states that as the price of a good or service decreases, the quantity supplied by producers decreases.

• The Law of Supply states that as the price of a good or service increases, the quantity demanded by consumers decreases.

• The Law of Supply states that as the price of a good or service increases, the quantity supplied by producers also increases.

• The Law of Supply states that as the price of a good or service remains constant, the quantity supplied by producers increases.

Define Market Equilibrium.

• State where there is no supply or demand, resulting in price volatility.

• State where demand exceeds supply, leading to fluctuating prices.

• State where supply exceeds demand, leading to price stability.

• State where supply equals demand, leading to stable prices.

How is price determined in a market?

• Price is determined by the interaction of supply and demand.

• Price is determined by the color of the product.

• Price is determined by flipping a coin.

• Price is determined by the weather forecast.

What factors can affect demand in a market?

• Educational levels, social media trends, transportation infrastructure

• Technological advancements, government regulations, currency exchange rates

• Weather conditions, political stability, global economic trends

• Price changes, consumer preferences, income levels, population demographics, advertising, availability of substitutes

What factors can affect supply in a market?

• Changes in demand, weather conditions, consumer preferences

• Global economic trends, advertising strategies, market competition

• Labor strikes, transportation disruptions, currency exchange rates

• Changes in production costs, technology, government regulations, number of suppliers, and expectations of future prices.

Describe the concept of equilibrium in economics.

• Equilibrium refers to a situation where prices are constantly fluctuating.

• Equilibrium is when demand exceeds supply in the market.

• Equilibrium means that there is no need for government intervention in the economy.

• Equilibrium in economics is a state where economic forces such as supply and demand are balanced, resulting in no tendency for change.

What is Quantity Demand?

• Quantity Demand is the price at which consumers are willing to sell a product.

• Quantity Demand is the total number of products available in the market.

• Quantity Demand is the amount of a product that consumers are required to purchase.

• Quantity Demand is the amount of a product or service that consumers are willing and able to purchase at a specific price point within a given time period.

What is Quantity Supply?

• Quantity supply is the amount of a good or service that producers are willing and able to sell at a given price in a specific time period.

• Quantity supply is the total amount of a good or service available in the market

• Quantity supply is the amount of a good or service that consumers are willing to buy at a given price

• Quantity supply is the price at which producers are willing to sell a good or service

How do changes in demand and supply impact market equilibrium?

• Changes in demand and supply have no impact on market equilibrium

• Changes in demand and supply only affect quantity but not price

• Changes in demand and supply always lead to a decrease in price

• Changes in demand and supply impact market equilibrium by shifting the equilibrium price and quantity.