Why does the law of demand not operate in macroeconomics?

Solutions

Expert Solution

If we talk in simple terms then law of demand simply says that if other things are held constant then price and quantity demanded are inversely related which means if the price increases then quantity demand will decrease and vice versa

it comes under the microeconomics because it deals with a small firm or individual level but when we talk about macroeconomics then it gives a overall bigger picture of the economy which is like calculation of unemployment rate , Inflation level

If we take macro factors thenthe factors does not become constant and they become variable

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

Define "demand" and the Law of Demand. Why does the demand curve have a negative slope?...

Define "demand" and the Law of Demand. Why does the demand curve have a negative slope? Discuss these reasons with respect to why a demand curve for olives has a negative slope. 2. Define, derive and illustrate graphically a market demand curve for olives with only three countries (Spain, Italy and Greece) demanding olives from the market. 3. Discuss and illustrate graphically the difference between a change in quantity demanded and a change in demand.

One of the classic principles of macroeconomics is the law of supply and demand. This discussion...

One of the classic principles of macroeconomics is the law of supply and demand. This discussion forum ask you to complete several tasks in your initial post, all related to this law. First, please explain what is meant by the law of supply and demand and how this law could be graphically summarized. As you do so, pay careful attention to the difference between a movement along a supply or demand curve as opposed to a shift in the curve....

Law of Supply and Demand Microeconomics vs. Macroeconomics Gross Domestic Product (GDP) definition and example.

4a) i. Explain why the monopolist will not operate on the inelastic portion of the demand...

4a) i. Explain why the monopolist will not operate on the inelastic portion of the demand curve. ii. Derive the slope of the Monopolist marginal revenue cure. 4b) i, Illustrate why and how a government may intervene in the monopoly structure. ii. Discuss why and how a monopolist practices price discrimination.

Explain the law of demand. What does it imply about the shape of the demand curve?...

Explain the law of demand. What does it imply about the shape of the demand curve? What relationship is shown by a demand curve?

How does the ppbRAE operate and why is it not able to measure individual gases?

What is Law of Demand? What is Law of Supply? Analyze how the Law of Demand...

What is Law of Demand? What is Law of Supply? Analyze how the Law of Demand applies to a Recent Purchase that you made. Describe how the product has changed in price and explain whether the price change is due to supply or demand. Did the change in price affect your decision to purchase the item?

What market structure does aerie operate in? Why? Analyze the characteristics of this market. What does...

What market structure does aerie operate in? Why? Analyze the characteristics of this market. What does economic theory tell you about the role of advertising in this market? What can you say about economic profits for this firm in the short run as well as the long run? Does data support economic theory? How can this profit stream change over time?

LAW OF DEMAND

Explain the law of demand along with definition given by alfred marshall.

1. Macroeconomics does not try to answer the question of: a. why do some countries experience...

1. Macroeconomics does not try to answer the question of: a. why do some countries experience rapid growth? b. what is the rate of return on education? c. why do some countries have high rates of inflation? d. what causes recessions and depressions. 2. How does the distinction between flexible and sticky prices impact the study of macroeconomics? a. The study of flexible prices is confined to microeconomics, while macroeconomics focuses on sticky prices. b. Macroeconomists use flexible prices to...

Subjects