Supply And Demand

Question 1

Demand definition

Answer 1

The quantity that customers are willing and able to pay at a given price in a given period of time

Question 2

Factors affecting demand

Answer 2

• price
• incomes
• preferences
• advertising
• demographic change
• external shocks
• seasonal factors

Question 3

Basic law of demand

Answer 3

Demand varies inversely with price:

Lower prices, higher demand

Question 4

Supply definition

Answer 4

The quantity of a good/service that a producer is willing and able to supply onto the market at a given price in a given time period

Question 5

Factors affecting supply

Answer 5

• cost of production
• external shocks
• technological change
• subsidies

Question 6

Basic law of supply

Answer 6

Higher prices, higher quantity supplied

Question 7

Equilibrium

Answer 7

State of equality between demand and supply

Question 8

Disequilibrium

Answer 8

When demand and supply are out of balance