Questions about demand and supply? please help...?
Explain the concept of supply.
Answer:
The trick in explaining demand is to be as simple as possible.
The word 'demand' is short for 'demand function' or 'demand schedule' or 'demand relationship'. It simply is a relationship between quantities and prices. You can list this in a schedule:
Q P
0 6
1 4
2 1
3 .5
Or a function:
P = 15 - 2Q
What does it mean? For every price is shows the quantity you would want to buy.
Why is it downward sloping? Well, the cheaper a thing is don't you want to buy more of it?
If you drew this with P and Q axis, what causes it to shift out? If your income rose, you would probably want to buy more at each price. If you saw some advertising, same thing.
The demand schedule, depicted graphically as the demand curve, represents the amount of a good that buyers are willing and able to purchase at various prices, assuming all other non-price factors remain the same. The demand curve is almost always represented as downwards-sloping, meaning that as price decreases, consumers will buy more of the good
The supply schedule is the relationship between the quantity of goods supplied by the producers of a good and the current market price. It is graphically represented by the supply curve. It is commonly represented as directly proportional to price. The positive slope in short-run analysis can reflect the law of diminishing marginal returns, which states that beyond some level of output, additional units of output require larger doses of the variable input. In the long run (such that plant size or number of firms is variable), a positively-sloped supply curve can reflect diseconomies of scale or fixity of specialized resources.
Where demand and supply intersect, it's called the point of equilibrium or market balance. It's where consumers' (buyers) and suppliers' (buyers) demands intersect and find common agreement on a single price both find acceptable to trade.
Keep it simple.
Demand is something that you'll get.
Supply is something that you got.
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