Question

1. Define ‘Demand’ and ‘Supply’. Explain what the determinants are of demand and supply. Please explain briefly.

Answer 1

Demand intand supply are interrelated

Demand is from consumer side and the supply is from the producer side

Demand is the consumer desire to buy and willingness to pay for any good service

Supply is a good or service available by the producers to the consumers

Determinants of demand are-

Income level of consumer

Expectation level of consumers

Presence of substitutes in the market

Taste and preferences

Determinants of supply causes the shift of supply to either right or left

Some of the determinants are

Presence of technology

Taxes and subsidies

Expectation level of suppliers