a. Define carefully what is meant by a demand schedule or a curve. b. State the law of (downward sloping) demand.
c. Illustrate the law of downward sloping demand with two cases of your own experience.
Answer to a:
Demand curve, which graphs the demand schedule, shows how the quantity demanded of the good changes as its price varies with related goods, tastes, expectations, or the number of buyers, the quantity demanded at each price changes; this is represented by a shift in the demand curve.
Answer to b:
The law of demand, the demand curve is almost always represented as downward-sloping, meaning that as price decreases, consumers will buy more of the good.
If the demand decrease: an inward shift of the curve. If the demand starts at D1, and decreases to D2, the price will decrease, and the quantity will decrease (here the quantity is constant as the supply curve is a straight line). This is an effect of demand changing. Answer to c:
The demand VCR’s is the most evident example of the law of downward sloping demand. As the demand of VCR has decreased, the demand curve shifts downwards with price becoming low. The demand of Desktop pc is another example of downward sloping demand. Where a desktop pc has become less in demand and is available at lower prices.
a. Define the concept of supply schedule or curve.
b. Show that an increase in the supply means a rightward and downward shift of the supply curve. c. Contrast this with right ward and upward shift of the demand curve implied by the increase in demand.
Answer to a:
The Supply Schedule and Curve
Table 1: A Supply Schedule for Apartments|
Price ($1000s)| 100 | 99 | 98 | 97 | 96 | 95 | 94 | 93 | 92 | 91 | 90 | Quantity of Apartments Supplied| 10 | 9 | 8 | 7 | 6 | 5 | 4 | 3 | 2 | 1 | 0 | A supply schedule shows us, in the form of a table, the quantity of a good or service that would be offered by the sellers at...