Understanding Demand and Supply

What does the Law of Demand state?

• As the price decreases, the quantity demanded increases.

• As the price increases, the quantity demanded decreases.

• Higher prices lead to higher demand for goods.

• The quantity demanded remains constant regardless of price changes.

How does a decrease in price affect the quantity demanded?

• An increase in price demanded.

• An increase in quantity demanded.

• No effect on quantity demanded.

• A decrease in quantity demanded.

What is the relationship between price and quantity demanded?

• As price decreases, quantity demanded increases; as price increases, quantity demanded decreases.

• Quantity demanded remains constant regardless of price changes.

• Price has no effect on quantity demanded; they are independent of each other.

• As price increases, quantity demanded increases; as price decreases, quantity demanded decreases.

What does the Law of Supply state?

• The Law of Supply states that lower prices lead to a higher quantity supplied.

• The Law of Supply states that supply is independent of price changes.

• The Law of Supply states that higher prices lead to a lower quantity supplied.

• The Law of Supply states that higher prices lead to a higher quantity supplied.

How does an increase in price affect the quantity supplied?

• An increase in price leads to a decrease in demand.

• An increase in price leads to an increase in the quantity supplied.

• An increase in price has no effect on the quantity supplied.

• An increase in price decreases the quantity supplied.

What is the relationship between price and quantity supplied?

• There is a direct relationship; higher prices lead to higher quantity supplied.

• There is no relationship between price and quantity supplied.

• Higher prices lead to lower quantity supplied.

• Higher prices decrease the quantity supplied.

What are some non-price factors that can shift the demand curve?

• Population, Indirect tax, Number of buyers, Tax, Subsidies, cost of production

• Productivity, Indirect tax, Number of Firms, Technological advancements, subsidies, cost of production

• Productivity, Income tax, Number of factories, Tax, Substitutes, Weather, cost of products.

• population, advertising, consumer expectations, Income, fashion, Compliments, substitutes

How does consumer income affect the demand for a normal good?

• A decrease in consumer income leads to an increase in the demand for a normal good.

• Consumer income has no effect on the demand for a normal good.

• An increase in consumer income leads to an increase in the demand for a normal good.

• An increase in consumer income decreases the demand for a normal good.

What effect does a change in consumer expectations have on the demand curve?

• A change in consumer expectations shifts the demand curve.

• A change in consumer preferences has no effect on the demand curve.

• A change in consumer preferences only affects the supply curve.

• A change in consumer preferences leads to a decrease in demand regardless of other factors.

What are some non-price factors that can shift the supply curve?

• Technology changes, Advertising strategies by competitors, number of buyers

• Direct tax, Seasonal changes in weather, number of firms and substitutes

• Increase in consumer demand, weather, subsidies, advertising

• Changes in production costs, technology, number of suppliers, and indirect tax.