Question

Let's talk about supply and demand. Pretend that you are trying to explain this concept to your friend that has never taken an economics course before. Give us your definition in your own words and give a real life (or fictitious) example.

Answer 1

Ans) Demand ÷ at different prices, people are able and willing to buy different quantity of goods (i.e quantity demanded), when all these quantity demanded are arranged, we get demand. That is, different quantities demanded at various prices by the consumer is known as demand. A demand curve is downward sloping.

Supply ÷ it is the willingness of a seller to supply different quantity of goods at different prices. A supply curve is upward sloping.

For eg- if pal is able and willing to buy 10 units at $10, 8 units at $15, 6 units at $20 and 2 units at $ 25 then This whole data represents demand of pal, which can be represented using a demand schedule (i.e table) or demand curve.

Suppose sam is willing to supply 10 units at $10, 16 units at $15, 18 units at $20 and 22 units at $25 then this whole data represents supply of sam. It can be represented using a table or a graph.