Question

1A Draw a demand curve and illustrate a change in quantity demanded.

1B. What factor directly changes quantity demanded?

1C. Draw a demand curve and illustrate a change in demand.

1D. What factors cause a change in demand?

1E. Draw a supply curve, S1 and a second supply curve, S2 that represents an increase in supply.

1F. Give three examples that cause supply to increase.

1G. Explain the difference between “change in quantity supplied” and “change in supply”.

Answer 1

1a.

When there is change in the quantity demanded then there is movement on the demand curve either in upward or downward direction

1b. If we talk about the quantity demanded only then thefactor causes change is the only price and it follows the law of demand

According to law of demand if other things are held constant then price and quantity demanded are inversely related

1c. If we talk about demand then there is change in demand

The the curve shifts eitherright or left

On this case there is no movement

1d.

The factor that causes change in demand are-

Income level of consumers

Expectation level of consumers

Taste and preferences of the consumers

Presence of substitutes or complement in the market

1e.

1f.

When we talk about supply curve then it is upward sloping in nature showing the direct relationship between price and quantity supplied

Some of the causes that in leads to change in supply are

Presence of technology in the market

Presence of competition in the market

Expectation level of suppliers

1g.

If we talk about the difference between quantity supplied and supply then if the factor present is only price then there is change in the quantity supplied and if more than the price factor at present like

Presence of technology in the market

Presence of competitors in the market

Expectation level of suppliers