Understanding Supply and Demand

What is the law of demand?

• The law of demand indicates that price and quantity demanded are inversely related.

• The law of demand indicates that higher prices lead to higher quantity demanded.

• The law of demand suggests that demand remains constant regardless of price changes.

• The law of demand states that price and quantity demanded are directly related.

How does an increase in supply affect market prices?

• An increase in supply generally lowers market prices.

• An increase in supply leads to price stability.

• An increase in supply has no effect on market prices.

• An increase in supply raises market prices.

What factors can shift the demand curve?

• Technological advancements in manufacturing

• Changes in weather patterns

• Factors that can shift the demand curve include consumer income, preferences, prices of related goods, expectations, and number of buyers.

• Government regulations on production

Explain the concept of equilibrium price.

• The equilibrium price is the price at which quantity demanded equals quantity supplied.

• The equilibrium price is the average price over a period of time.

• The equilibrium price is the highest price consumers are willing to pay.

• The equilibrium price is determined solely by government regulations.

What happens to the supply curve when production costs decrease?

• The supply curve becomes vertical.

• The supply curve shifts to the left.

• The supply curve shifts to the right.

• The supply curve remains unchanged.

Who is the father of economics

• m keynes

• Adam smith