Question

I want to remind everyone that our first DQ is due Saturday night. Let's begin by showing your understanding of supply and demand.

Create a supply and demand graph in Excel that demonstrates the relationship between the amount buyers are willing to purchase and the quantity available (see page 100 for an example). You may create your own data points (less than 10 data points). Please attach your graphs.

Your supply and demand graph should be labeled with: price, quantity, a supply line, and a demand line.

On a separate graph, show an outward shift in market supply.

Answer 1

Quantity demanded is the amount of goods buyers are willing and able to purchase at a partcular price .Sellers are willing to sell the same quantity of a product that buyers are willing to purchase in the market.The demand curve shows the inverse relation between price and quantity demanded. As price falls quantity demanded increases and vice versa.Supply curve shows the relation between quantity supplied and price .It shows a positive relation with price.At higher prices more will be supplied and less will be supplied at lower prices.

Demand and supply schedule--

price--quantity demanded ---quatity supplied (attached)

An outward shift of market supply curve for chicken  is shown by shift of S1 to S2.More can be supplied at the same price level.The market supply curve will shift if there is a change in non price factor ie factors other than price.Eg consumer's taste and preference changes.