EXERCISE 3.2 & 3.3 (Change in Demand)
Market Equilibrium is defined as the price where the Quantity Demanded is equal to Quantity Supplied so that there is no Surplus or shortage in the market.
Market Equilibrium is defined as the price where the Quantity Demanded is equal to Quantity Supplied so that there is no Surplus or shortage in the market.
Exercise 3-3: Effect of changes to demand
By definition, demand is the quantities that consumers are willing and able to buy at different prices at specific period of time. So to truly understand what causes the demand to change, we have to look back at the determinants of demand and in this case are the prices. Prices play a big role in the market in such a way that if the price of particular product that has high demand goes up, people wouldn’t be interest in that product anymore and they would turn into substitute products.
My personal example for change in demand would be purchase of computers. My first computer cost me $1200, but today I can buy a laptop for only $500 that’s twice cheaper than the first I got. Relating to example, this will cause a big change in demand curve if I had to graph it.
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