(EXPLAIN IN YOUR OWN WORDS) Explain as completely as you can (IN YOUR OWN WORDS)

Question

(EXPLAIN IN YOUR OWN WORDS) Explain as completely as you can (IN YOUR OWN WORDS) what an economist means by demand (supply) and discuss (this implies that you are able to discuss why the factor causes the shift and explain the direction of the shift ...(this can be done in one sentence for each factor) ALL the factors that can shift a demand (supply) curve.

How does a change in demand (supply) differ from a change in quantity demanded (quantity supplied)?

Explain what happens to Pe and Qe when demand (supply) increases and when demand (supply) falls.

Explanation / Answer

Demand (supply) – Demand I feel is the relationship between the quantity of a good or services consumers will purchase and the price charged for that good. Demand arises when there is a need for consumption/ utilization.

It is also our willingness to go out and buy a certain product. For example, market demand is the total of what everybody in the market wants.

Factors that affect demand curve:

Supply and quantity supplied work the same way as demand and quantity demanded. When quantity supplied increases, it's because of the price of the product itself. So, for example, when the price increases, then the quantity supplied of the product goes up. This is a movement along the supply curve. When supply changes, the entire supply curve shifts either to the right (increase) or to the left (decrease). The distinction between supply and quantity supply, again, is as a result of the different reasons why the amount that firms supply changes. When quantity supplied changes, the reason is that the price of the product goes up. When supply changes, the reason is that one of the four supply determinants changes, for example, technology or prices of inputs and so forth.

If supply falls and demand increases then price will rise but reaction of quantity will depend on supply/demand shift sizes.
If supply increases and demand falls then price will fall too but reaction of quantity will depend on supply/demand shift sizes.

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