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Economics (Supply & Demand)

Supply and demand are key economic concepts that determine market prices. The Law of Demand states that as prices decrease, quantity demanded increases, while the Law of Supply indicates that higher prices lead to greater quantity supplied. Equilibrium occurs when the quantity demanded equals the quantity supplied, illustrated by the example of mango prices fluctuating with seasonal availability.

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Patrick Nithish
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5 views1 page

Economics (Supply & Demand)

Supply and demand are key economic concepts that determine market prices. The Law of Demand states that as prices decrease, quantity demanded increases, while the Law of Supply indicates that higher prices lead to greater quantity supplied. Equilibrium occurs when the quantity demanded equals the quantity supplied, illustrated by the example of mango prices fluctuating with seasonal availability.

Uploaded by

Patrick Nithish
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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4.

Economics (Supply & Demand)

Supply and demand are fundamental concepts in economics that describe how prices are
determined in a market economy.

 Law of Demand: There is an inverse relationship between price and quantity


demanded. When the price of a product decreases, consumers are willing to buy more,
and when it increases, they buy less.
 Law of Supply: There is a direct relationship between price and quantity supplied. As
the price increases, producers are willing to supply more of a good because it
becomes more profitable.
 Equilibrium: The point where supply and demand curves intersect is known as the
equilibrium point. At this price, the quantity demanded equals the quantity supplied.
 Real-life Example: If the price of mangoes drops during peak season, more people
will buy them (demand rises). However, if the price goes up during off-season,
demand will drop, and only limited suppliers will provide them.

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