Direct relationship - • higher price more 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 •...

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