Assessment: Supply and Demand in Economics

Pages: 2 (899 words)  ·  Bibliography Sources: 1  ·  Level: College Senior  ·  Topic: Business  ·  Buy This Paper

Supply and Demand

In economics, demand is the quantity of service or goods that consumers are able to buy at a given price. The change in demand more often than not occurs only if the demand factor such as the taste and the preference, the income of the consumer, the price of substitute goods, and the price of complimentary goods happens to change. A change in demand can be shown visually as the shift of the demand curve. Conversely, Quantity demanded is the quantity of the goods or services that consumers may will to buy at a given price. The change in the quantity demanded can only be caused by the price change.

Example of change in demand and a change in Quantity demanded

A good example is in the scenario of what happened in the United States in regards to the housing market in the year 2008. The scenario provided definitive example of a "change in demand" and a "change in the quantity demanded." When the demand for the house declined, this shifted the demand curve towards the left making the supply curve not to be horizontal. This clearly showed that the drop in demand led to the price decline, hence lowering the price that would have been used in increasing the quantity demanded beside the new demand curve.

The equilibrium price-quantity combinations for restaurant meals

In every single market, the law of demand is necessary given that, the goods that are demanded for should be inversely related to the stated price, while other things can remain constant. In the scenario given, the person is not correct when he says that the market for restaurant meals in city for a four-year period needs the law of demand, this is because, the market has already have the law of demand and the Quantity demanded is inversely related to the price over the four-year period.

Provision of subsidy payment to U.S.

One major effect of the introduction of subsidies on the market for sugar is that, the price that the producers will need for producing the sugar will definitely fall making the supply curve for the sugar to shift down. This may be as a result of excess supply within the original price that makes the price to fall hence a movement along supply curve as well as demand until the new equilibrium is forced to reach the sugar market at a lower price. The other effect may be caused by the price and sweetness of the sugar. If the price of sugar is low, the customers will definitely switch away from the artificial sweetness making the demand for the sweeteners to fall in price- the demand curve shifts to… [END OF PREVIEW]

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Supply and Demand in Economics.  (2013, February 10).  Retrieved June 16, 2019, from https://www.essaytown.com/subjects/paper/supply-demand-economics/1593905

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"Supply and Demand in Economics."  10 February 2013.  Web.  16 June 2019. <https://www.essaytown.com/subjects/paper/supply-demand-economics/1593905>.

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"Supply and Demand in Economics."  Essaytown.com.  February 10, 2013.  Accessed June 16, 2019.
https://www.essaytown.com/subjects/paper/supply-demand-economics/1593905.