Question

How would you use the theory of Demand and Supply to explain something that you have observed about the world? Your answer needs to provide at least three paragraphs. The first paragraph identifies and explains in your own words the observation of the world. The second paragraph identifies the supplier and consumers in your observation. The third paragraph explains how the supply and demand changed to explain the event in the world.

Answer 1

In relation to demand and supply it is observed that demand for goods and services and supply of goods and services depend on price , other things remaining unchanged. When price increases demand falls and vice versa . Supply increases with increase in price and decreases with decrease in price . Thus demand has an inverse relation with price and supply has a positive relation with price.So in the world all demand and supply are related to price.

The suppliers supply more when prices rise and less when prices fall.Consumers consume more with fall in price, and less with rise in price.

The event in the world is Covid 19 . Because of this event there has been a change in demand and supply.The pandemic has led to panic buying . Suppliers are happy with demand as higher demand is raising prices.The pandemic has led to market failure where high demand meets limited supply.It is now the sellers market.