Economics Today: The Micro View (18th Edition)
Economics Today: The Micro View (18th Edition)
18th Edition
ISBN: 9780133885071
Author: Roger LeRoy Miller
Publisher: PEARSON
Question
Book Icon
Chapter 4, Problem 4.2LO
To determine

Law of demand, Law of Supply, Increase/Decrease in the demand and supply, Market equilibrium

Concept Introduction-

Law of Supply Other things being equal, It states that as the price of a good increases its quantity supplied increases and vice versa. In other words, there is a direct relationship between the quantity supplied and price of the good. The law is based on the assumption of ceteris paribus, that is, all other factors affecting supply remain constant.

Law of Demand − Other things being equal, it states that as the price of a good increases its quantity demanded decreases and vice versa. In other words, there is an inverse relationship between the quantity demanded and price of the good. The law is based on the assumption of ceteris paribus, that is, all other factors affecting demand remain constant.

Change in Supply- It is also known as the Increase/Decrease of Supply. A change in the supply due to factors other than price called exogenous factors like cost of production, level of technology etc. causes the supply curve to shift.

Change in demand- It is also known as the Increase/Decrease of demand. A change in the demand due to factors other than price called exogenous factors like income of the consumers, their tastes and preferences and prices of substitutes and complements causes the demand curve to shift.

Market Equilibrium- The price output combination where quantity demanded equals the quantity supplied is the market equilibrium. It is based on the operation of the law of demand and the law of supply.

Blurred answer
Students have asked these similar questions
Answer question 2 only.
1. A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate fund, and the third is a (riskless) T-bill money market fund that yields a rate of 8%. The probability distributions of the risky funds have the following characteristics: Standard Deviation (%) Expected return (%) Stock fund (Rs) 20 30 Bond fund (RB) 12 15 The correlation between the fund returns is .10.
Frederick Jones operates a sole proprietorship business in Trinidad and Tobago. His gross annual revenue in 2023 was $2,000,000. He wants to register for VAT, but he is unsure of what VAT entails, the requirements for registration and what he needs to do to ensure that he is fully compliant with VAT regulations. Make reference to the Vat Act of Trinidad and Tobago and explain to Mr. Jones what VAT entails, the requirements for registration and the requirements to be fully compliant with VAT regulations.
Knowledge Booster
Background pattern image
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:9780190931919
Author:NEWNAN
Publisher:Oxford University Press
Text book image
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Text book image
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Text book image
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Text book image
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Text book image
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education