What does Q represent on the graph the point where equilibrium is achieved?
A. the point where equilibrium is achieved. the point where supply and demand drop. …
What does P represent on the graph?
What does “P” represent on the graph? the price at the equilibrium point. The graph shows a point of equilibrium. If the quantity supplied is greater than the quantity demanded, what must happen to the price in order to reach equilibrium? The price of the product will decrease to meet equilibrium.
Which explains why the price indicated by p2 on the graph?
As prices rise, demand goes down. Which explains why the price indicated by p2 on the graph is lower than the equilibrium price? As prices fall, demand goes up. The graph shows a point of equilibrium.
Which needs to happen to the price indicated by p2?
Which needs to happen to the price indicated by p2 on the graph in order to achieve equilibrium? It needs to be decreased. A limited amount of goods available means that excess is occurring.
How many goods must be supplied to achieve?
Answer Expert Verified. It might be said that 15 goods are supplied. It could be added that equilibrium is defined when demand and supply meet and it also might include a supply curve. However, if the supply is high and the demand is low the price should decrease in order to get equilibrium.
What does an increase in demand mean?
An increase in demand means that consumers plan to purchase more of the good at each possible price. c. A decrease in demand is depicted as a leftward shift of the demand curve. d. A decrease in demand means that consumers plan to purchase less of the good at each possible price.
What is relationship between price and supply?
The law of supply states that a higher price leads to a higher quantity supplied and that a lower price leads to a lower quantity supplied. Supply curves and supply schedules are tools used to summarize the relationship between supply and price.
Why does price increase when demand decreases?
If the price goes up, the quantity demanded goes down (but demand itself stays the same). If the price decreases, quantity demanded increases. This is the Law of Demand. On a graph, an inverse relationship is represented by a downward sloping line from left to right.
What are the three exceptions to the law of demand?
The three exceptions to the law of Demand are Giffen goods, Veblen effect and income change.
Is Salt a Giffen good?
Giffen goods: Giffen goods are some special varieties of inferior goods. Cheaper varieties of goods like bajra, potatoes, salt etc. comes under giffen goods. So, rise in price of these goods does not change the demand for these goods.
Is Diamond A Giffen good?
Veblen goods are generally more visible in society than Giffen goods. For example, economists often view diamonds as a Veblen good because of the higher prestige value of a diamond; the higher is the desirability. Some people will also buy fewer diamonds when the price falls.
Does law of demand always exist?
Answer: yes the law of demand always exist.
What is demand determinants?
The five determinants of demand are: The price of the good or service. The income of buyers. The prices of related goods or services—either complementary and purchased along with a particular item, or substitutes and bought instead of a product. The tastes or preferences of consumers will drive demand.
Why does law of demand exist?
Definition: The Law of Demand explains the downward slope of the demand curve, which posits that as the price falls the quantity demanded increases and as the price rise, the quantity demanded decreases, other things remaining unchanged.