Question

1. Come up with an example for “market equilibrium” from your everyday life, and briefly explain how this equilibrium can be achieved.
2. Use an example to explain the difference between demand and quantity demanded.

Answer 1

1.Market equilibrium is a condition where demand exactly the supply .

demand is from the consumer side and supply is from the producer side.

for example in winter season, due to high demand of winter clothes there is an equal match of demand and supply.

In price and demand curve, they both intersect at a point and the point is called equilibrium point.

2. Main difference between demand and quantity demand is that if there is only one factor which causes change and that factor is price then there will be quantity demanded .

For if price of tea Rises,then quantity demand of tea decreases .

If more than one factor then just the price is involved then there will be whole Change in the demand .

If there is change in quantity demanded then there is a movement on the demand curve but if there is change in demand then whole demand curve shift that either rightward right or leftward.