Economics 10a: Microeconomics-Supply and demand

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huzafamajeedjahan

4 Mar 2023

School

Harvard University

Department

Economics

Course

Economics 10a

Professor

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Document Summary

These are examples of supply and demand in action! Supply and demand are the two main factors that determine the price and availability of goods and services in a market. Supply refers to the amount of a product that producers are willing to sell at a given price, while demand refers to the amount of a product that consumers are willing to buy at a given price. The relationship between supply and demand is what determines the price and quantity of a product that is sold in a market. When there is more demand for a product than there is supply, the price will go up. When there is more supply than there is demand, the price will go down. For example, let"s say that there is a lot of demand for a popular toy during the holiday season. The stores might increase the price of the toy because they know that people will pay more for it.

Related Questions

Which of the following defines a demand curve?

a. The law of demand represents a state in which the conflicting forces of supply and demand are in balance.
b. The law of demand represents those resources that go into the production of any given product.
c. A principle that states there is a direct relationship between the price of a good and the quantity of it producers are willing to supply.

d. A principle that states there is an inverse relationship between the price of a good and the quantity of it buyers are willing to purchase.

beigetortoise256

1. Supply and demand show the relationships between two main variables, price and quantity. How are they depicted in demand, and in supply? What other factors impact the relationships between price and quantity in supply and demand?

2.If a market is in equilibrium, is it necessarily true that all buyers and sellers are satisfied with the market price? Briefly explain.

carmineotter908

1. If the price of a product decreases, we would expect:

a. Demand to increase

b. Quantity supplied to decrease

c. Supply to decrease

d. Quantity supplied to increase

2. "Price" in the statement of the Law of Supply refers to:

a. The amount that buyers are willing and able to pay for each unit of the product.

b. Marginal cost of producing the last unit of the product.

c. The total revenues that sellers receive for selling a given quantity of the product.

d. The total amount that buyers pay to acquire a given quantity of the product.

3. A decrease in demand and an increase in supply will:

a. Affect price in an indeterminate way and decrease the equilibrium quantity

b. Increase the price and affect the equilibrium quantity in an indeterminate way

c. Decrease price and affect the equilibrium quantity in an indeterminate way

d. Increase the price and increase the equilibrium quantity

4. When producers (say, of roads) are not able to make all consumers pay for enjoying their product (i.e., the roads), they tend to see:

a. The marginal cost of production is too low, and there is a supply-side market failure

b. The marginal benefit of production is too high, and there is a demand-side market failure

c. The marginal cost of production is too high, and there is a supply-side market failure

d. The marginal benefit of production that is too low, and there is a demand-side market failure

peachcrow879

Economics 10a: Microeconomics-Supply and demand

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