Explain how changes in two (2) factors that affect the supply of your good (e.g., input costs, number of suppliers) affect the equilibrium quantity and price of your good or service in the market.
2.Discuss the characteristics of your good (e.g., is your good a necessity or luxury?) and determine if the good or service you have chosen exhibits elastic, inelastic, or unitary elastic demand. Justify your answer.
3.Suppose that the government decides to introduce a price floor in the market. Discuss what will happen to the quantity of the good in your market, who would benefit, and who would lose from the decision to implement a price floor.
4.Include three (3) external peer-reviewed sources to support your position
The specific course learning outcomes associated with this assignment are:
•Discuss the concepts of supply and demand, and consumer choice theory as they relate to current economic issues.
•Discuss methods of price determination, elasticity, and utility analysis.
•Use technology and information resources to research issues in microeconomics.
•Write clearly and concisely about microeconomics using proper writing mechanics
Concept Of Supply And Demand
Length: 3 pages (825 Words)
Concept of Supply and Demand
The concept of supply and demand is fundamental to the market economy. Demand is the quantity of a commodity that an individual is willing to buy at a given price, whereas supply is the quantity of goods that a producer is willing to sell at a certain price in the market. The law of demand states that as price of a commodity increases, then its demand decreases leading to demand curve that slopes downwards from left to right. Inversely, as the price of a product increases, its supply increases, hence a supply curve that slopes upwards from left to right. Further, when supply and demand are equal, then the market is said to be at equilibrium. Thus, the point of intersection between supply and demand indicates the equilibrium quantity demanded and the equilibrium price.
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