Economics - Demand, Supply, and Equilibrium

Desire backed by purchasing power and willingness to pay the price.

It states that when all other factors remain constant, if the price of a good rises, the quantity demanded decreases, and if the price falls, the quantity demanded increases.

It shows the various quantities of goods demanded at different price levels.

1. Individual Demand Schedule 2. Market Demand Schedule

It states that as the price of a good increases, the quantity supplied also increases, and vice versa, assuming all other factors remain constant.

It is the point where the quantity demanded equals the quantity supplied, resulting in a stable market price.

Demand elasticity refers to how sensitive the quantity demanded of a good is to a change in its price. If demand is elastic, a small price change leads to a large change in quantity demanded; if demand is inelastic, quantity demanded changes little with a price change.

There are certain situations where the Law of Demand does not hold true. For example, Veblen goods, Giffen goods, and products with snob appeal may see an increase in demand when prices rise.

The Law of Supply states that, all else being equal, as the price of a good rises, the quantity supplied increases; and as the price falls, the quantity supplied decreases.

A change in quantity demanded is caused solely by a change in the price of the good or service, assuming all other factors remain constant.

Market equilibrium is a state where the supply of a product matches the demand for it. At this point, the price at which the quantity demanded equals the quantity supplied.

The elasticity of supply is determined by factors such as production time, storage capacity, ease of shifting resources, and the existence of excess capacity.

An increase in price leads to an increase in the quantity supplied, while a decrease in price results in a decrease in the quantity supplied.