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Q1. WHAT IS DEMAND? WHAT IS SUPPLY? HOW DO WE DETERMINE EQUILIBRIUM PRICE? GIVE YOUR ANSWER...

Q1. WHAT IS DEMAND? WHAT IS SUPPLY? HOW DO WE DETERMINE EQUILIBRIUM PRICE? GIVE YOUR ANSWER IN 5 BULLET POINTS WITH COMPLETE EXPLANATIONS, DIAGRAMS (IF NECESSARY) AND EXAMPLES | EACH BULLET POINT CARRIES 1 MARK = 5 MARKS

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Answer #1

● Demand is the quantity of commodity or service which a consumer will be willing to buy in a given period of time at a given price.

●Supply is the quantity of a commodity offered for sale in the market by firm at various prices during a period of time.

● The price at which demand and supply are equal is known as equilibrium price.

●The point at which demand and supply curve of the market intersects help to find equilibrium price and equilibrium quantity

● in the figure DD shows demand curve SS shows supply curve and the point e is equilibrium P* is equilibrium price and Q* is equilibrium quantity

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