Direct relationship - higher price, more quantity Quantity...

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Macroeconomics 09/01/2008 13:21:00 Direct relationship = both variables go in same direction i.e.: a increases, b increases Inverse relationship = variables go in opposite directions i.e.: a increases, b decreases Supply and Demand Relationship between Price vs. Quantity demanded o On a graph X – axis: Quantity Y – axis: Price Create good trades lower price, lower quantity
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Unformatted text preview: higher price, more quantity Quantity demanded = quantity supplied o Cheaper product, greater demand? Supply: up o Supply curve goes up: higher price, Demand: descends Equilibrium = Where curves intersect Supply curve price increases quantity producers supply increases 09/01/2008 13:21:00 09/01/2008 13:21:00...
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Direct relationship - higher price, more quantity Quantity...

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