Question

1) Compare Demand Verse Quantity Demanded. 2) Explain the Law of Demand. 3) Compare Supply Verse Quantity Supplied. 4) Explain the Law of Supply. 5) Explain the Equilibrium, shortage, and surplus price and output conditions.   

Answer 1

1.

When at the given price an individual is willing and able to purchase any goods and services, then it is called demand.

At given different prices, the quantity demanded by individual is called quantity demand.

2.

Since the law of demand stats that there is an inverse relationship between price and quantity demanded and other factors which affect the demand remains same.

3.

When at the given price a seller is willing to sell any quantity of goods and services, then it is called supply.

At given different prices, the quantity supplied by a firm is called quantity supplied.

4

Since the law of supply stats that there is a direct relationship between price and quantity supplied and other factors which affect the supply remains same.

5.

In the demand and supply model, the equilibrium is determined by the intersection of demand and supply curve. Hence corresponding to the intersection equilibrium price is P* and quantity is Q* are determined.

When quantity demand is greater than quantity supplied, it is called shortage.

When quantity demand is less than quantity supplied, it is called surplus.