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Economics

Demand & Supply

Key Points

  • Law of Demand: price ↑ → quantity demanded ↓
  • Law of Supply: price ↑ → quantity supplied ↑
  • Equilibrium: demand = supply; surplus → price falls; shortage → price rises
  • PED > 1: elastic (luxury); PED < 1: inelastic (necessity)
  • Movement along curve: price change; Shift of curve: other factors

Practice Questions

3 questions
1

When the price of a good falls and its quantity demanded increases, this is an illustration of:

2

A good with a price elasticity of demand of 0.3 is said to be:

3

When the income of consumers increases, the demand for normal goods will:

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National Income