Question

In module 1 we discussed supply and demand. Create a children's story to explain the difference between a change in demand vs a change in quantity demanded using ice cream as your good. Also, include in your story a change in supply vs a change in quantity supplied regarding ice cream. To illustrate the changes you can make up your own.

Answer 1

Answer : Here children consumes ice cream. Now if the price of ice cream rise then children consume less quantities of ice cream. As a result, the quantity demanded for ice cream decrease. But if the price of ice cream fall then children consume more quantities of ice cream. As a result, the quantity demanded for ice cream increase. Thus, the quantity demanded change for ice cream.

Now if children consume more ice cream at existing price level then the demand of ice cream increase at existing price level. As a result, the demand curve shift to rightward. But if children consume less ice cream at existing price level then the demand of ice cream decrease at existing price level. As a result, the demand curve shift to leftward. Thus the demand change for ice cream.

Again, if price rise for ice cream then ice cream suppliers supply more quantities of ice cream. As a result, the quantity supplied increase. But if price fall for ice cream then ice cream suppliers supply less quantities of ice cream. As a result, the quantity supplied decrease. Thus the quantity supplied change for ice cream.

Now if ice cream producers produce more at existing price level then the supply of ice cream increase at existing price level. As a result, the supply curve shift to rightward. But if ice cream producers produce less at existing price level then the supply of ice cream decrease at existing price level. As a result, the supply curve shift to leftward. Thus, the supply change for ice cream.