EBK MODERN PRINCIPLES OF MICROECONOMICS
EBK MODERN PRINCIPLES OF MICROECONOMICS
3rd Edition
ISBN: 9781319111670
Author: COWEN
Publisher: YUZU
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Chapter 3, Problem 1FT
To determine

Relationship between the demand and supply.

Expert Solution & Answer
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Explanation of Solution

Demand and price are negatively related. Thus, when price of a good increases, the quantity of demand will fall. On the other hand, when price of good decreases, the quantity demand rise. This inverse relation of demand and supply is known as “Law of demand”.

Economics Concept Introduction

Concept introduction:

Law of demand: The law of demand states that if the price increases when other things remain the same, it will lead to an increase in the quantity demand and vice versa.

Demand: Demand refers to the total value of the goods and services that are demanded at a particular price in a given period of time.

Supply: Supply refers to the total value of the goods and services that are available for purchase at a particular price in a given period of time.

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