Laws of Demand And Supply - SS2 Economics Past Questions and Answers - page 1
What is the law of demand?
As the price of a good or service increases, the quantity demanded of that good or service increases.
As the price of a good or service decreases, the quantity demanded of that good or service decreases.
As the price of a good or service increases, the quantity supplied of that good or service increases.
What is the law of supply?
As the price of a good or service increases, the quantity demanded of that good or service increases.
As the price of a good or service decreases, the quantity demanded of that good or service decreases.
As the price of a good or service increases, the quantity supplied of that good or service increases.
What happens to the quantity demanded when the price of a good increases?
It decreases
It increases
It remains the same
What happens to the quantity supplied when the price of a good decrease?
It increases
It decreases
It remains the same
What happens to the equilibrium price and quantity when demand and supply both increase?
The equilibrium price increases and the equilibrium quantity decreases.
The equilibrium price increases and the equilibrium quantity increases.
The equilibrium price decreases and the equilibrium quantity increases.
What is the law of demand based on?
The assumption that as the price of a good or service increases, consumers will substitute it for a cheaper alternative or reduce their consumption, and vice versa.
What is the law of supply based on?
The assumption that as the price of a good or service increases, producers will be willing to supply more of it to the market to earn more profits, and vice versa.