Supply and demand can be considered as the backbone of the economy of the market. The amount which the market has to offer is called the supply. It means how much the suppliers can supply when the buyers pay a certain price…
Download file to see previous pages...
Demand relationship is the association between the amount demanded and the price it is demanded at. Supply and demand are expressed in terms of the price (J. R. Adil, 2006).
The force which distributes the resources is triggered by the correlation of supply and demand. The theories involved in market economy suggest that the supply and demand theory can distribute the resources in a highly efficient manner. To see how that happens we will study closely the laws of supply and demand.
According to the “Law of Demand”, considering all the other factors to remain constant, the price of a good is inversely proportional to its demand. If the price of a good is increased than less people would want it and if the prices are decreased then more people will want to buy the good. With the increase in price of a good or service, there is an increase in the opportunity cost of the purchase of that particular good or service and that is why less people buy that good. This will result in people not buying goods which will cause them to abstain from using goods which are more valuable to them. As shown in the graph below, the curve is a downward slope.
The curve of demand has three points on it which are A, B and C on it. On the curve, the relationship between price (P) and quantity (Q) is being directly represented at each point. So the quantity and price at point A will be Q1 and P1 respectively, and so on. The inverse relation between the price and quantity demanded is evident from the curve. At A the price is higher therefore the demand is lower whereas at C, the demand is higher and the price is lower (Economics Basics: Supply and Demand, 2003).
The law of supply exhibits those quantities which are sold at fixed prices similar to that in the “Law of Demand”, but the slope in the law of supply is upward. This means that the price and the amount supplied are directly proportional to each other. Higher the price higher will be the supply.
...Download file to see next pagesRead More
Cite this document
(“Microeconomics Summary paper Term Example | Topics and Well Written Essays - 1500 words”, n.d.)
Retrieved from https://studentshare.org/macro-microeconomics/1619271-microeconomics-summary-paper
(Microeconomics Summary Paper Term Example | Topics and Well Written Essays - 1500 Words)
“Microeconomics Summary Paper Term Example | Topics and Well Written Essays - 1500 Words”, n.d. https://studentshare.org/macro-microeconomics/1619271-microeconomics-summary-paper.
However, the two are interdependent in that they both examine impacts of business activities in terms of demand and supply. Microeconomics can be defined as a branch of economics which studies the behavior of individuals and the firms in making business decisions regarding resource allocation and price of goods and services.
Hence, microeconomics relates to the study of allocation of funds by different sections of users, which include domestic households, firms and industries. Their decision making pattern is thoroughly studied to make assessment and observation for the future forecast of market condition, particularly when resources are limited.
This paper explores economic reasons behind Apple`s domination of the tablet market. In addition to its price advantage, Apple had the advantage of being able to sell its merchandise through its own stores. Apple mastered its manufacturing process. The iPad has firmly seated itself as the global leader amongst tablet PCs.
Marginal cost is a concept in economics that describes the extra cost incurred in production of one extra unit of a good or service in a firm, the paper discusses both the utility theory and the marginal cost concept.
Utility can be defined as the satisfaction derived from the
It is of immense importance in view of the enforcement of academic disciplines as well as the implementation of disciplines learnt in practice. Bridging the rift between theory and practice of ethics in managers is a role played by the
Microeconomics can be defined as the study that analyses the actions of the individual players and the market structure where the agents operate. Microeconomics takes into consideration the private, domestic as well
8 Pages(2000 words)Term Paper
GOT A TRICKY QUESTION? RECEIVE AN ANSWER FROM STUDENTS LIKE YOU!
Let us find you another Term Paper on topic Microeconomics Summary paper for FREE!