Demand & Supply

High school
Essay
Miscellaneous
Pages 2 (502 words)
Download 0
The classical economics is pillared on the twin concepts of the demand and supply. Micro economics analysis of the consumer behaviour is explained by means of the law of demand and the firm behaviour is explained by means of the law of supply. Law of demand simply states that, ceterus paribus, a consumer would demand less of a good if its price is higher and more of the same good if its price is lower…

Introduction

Law of supply, on the other hand, proposes that firms would supply more of a good at a higher price than they would at a lower price. Again all other factors, notably scarcity of the good, are held constant. This results in an upward sloping supply curve. The market equilibrium is attained at a point where the demand and supply curves intersect giving us the equilibrium price. In this analysis the impact of an increase in consumer income is shown by a shift in demand curve outside. On this demand curve the consumer demands more of the good at the same price. Similarly a specific choice pattern of consumer would result in a differing demand curve. For instance take the example of a consumer who is collector of paintings from a particular historic period. This consumer can pay any price for a desired painting up to a certain point and his demand curve may be shaped accordingly. Whereas the supplier would continue to be governed by the basic law of supply. ...
Download paper
Not exactly what you need?

Related papers

Demand & Supply
Law of supply, on the other hand, proposes that firms would supply more of a good at a higher price than they would at a lower price. Again all other factors, notably scarcity of the good, are held constant. This results in an upward sloping supply curve. The market equilibrium is attained at a point where the demand and supply curves intersect giving us the equilibrium price. In this analysis the…
Supply and Demand Theory
Following an objective presentation of the Marshellian demand curve and consumer surplus, as presented in Marshall's Principles of Economics, this essay will present the critical analytical opinions which the aforementioned has generated.…
Demand and Supply Essay
For ringing out the inverse relationship between price and quantity, we have to assume that other things are equal which means that all the factors, other than the price of the goods remain unchanged. This is called the ceteris paribus assumption.…
Supply, Demand and Elasticity
It is used as a starting point to much more advanced economic models and theories.…
Supply and Demand Essay
The discussion then shifts to US perspective where in the price of the oil is determined to a great extent by the Americans. Nearly 25% of the world oil supplies are consumed by USA. The article concludes by stating that the price of the crude oil may go up to $200 per barrel in the coming years.…
Labor Supply and Demand Scenario
The latter sector constituted by men and women without reference to age and educational attainment, as long as they possess high quality of English proficiency and/or other foreign languages, depending on the destination countries.…
Supply and Demand
Rent control, the worst planning by governments lacking courage and vision, has been spearheaded by upstate lawmakers such as Assemblyman…