Chapter 3, Problem 13P

To determine

To explain:

The demand relationship in each of the following statements.

1. I would never buy a Taylor Swift album! You couldn’t even give me one for nothing.
2. I generally buy a bit more coffee as the price falls. But once price falls to $2 per pound, I’ll buy out the entire stock of the supermarket.
3. I spend more on orange juice even as the price rises. (Does this mean that I must be violating the law of demand)
4. Due to a tuition rise, most students at a college find themselves with less disposable income. Almost all of them eat more frequently at the school cafeteria and less often at restaurants, even though prices at the cafeteria have risen, too. (This one requires that you draw both the demand and supply curves for school cafeteria meals)

Concept Introduction:

Demand: The demand is defined as the ability to pay for goods and services.

Supply: The supply is the ability of the seller to produce the goods and services and sell it at the prevailing price

Equilibrium price: The equilibrium price is at which the demand and supply are equal