Supply and Demand

Supply and Demand - Essay Topic # Demand and Supply Econ...

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Essay Topic # Econ 185 Demand and Supply There are two tools that are used in economics to help us evaluate the status of a market. These two tools are Supply and Demand. Demand is the different amounts of a good a buyer is willing to purchase at different prices over a range of different prices. Supply is the different amounts of a good that a producer is willing and able to sell at different prices over a range of possible prices. These two measurements form curves that help to illustrate how a market is functioning (Figure 1). Along these curves, at different prices, mark the Quantity demanded and Quantity Supplied. These are additional tools used to look at the supply or demand of a product at a particular price (Figure 3). The Equilibrium of a market is the point at which both the demand curve and the supply curve intersect. This point illustrated the ideal location for optimal results in a market (Figure 1). Through the evaluation of these points and curves, we are able to evaluate a markets’ efficiency. The demand of a product depends on many factors. One of the factors that will create a shift in the demand curve is changes in consumers’ income. When a consumer has less income to spend, he/she will generally buy less of a product. If the demand for a good falls when income falls, the good is called a normal good, and when the demand for
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This note was uploaded on 11/13/2008 for the course ECON 1000 taught by Professor ? during the Spring '08 term at Baylor.

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Supply and Demand - Essay Topic # Demand and Supply Econ...

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