Demand and Supply

  1. What is demand?

Demand is desire to purchase and ability to pay for a commodity.

  1. Who is consumer?

Demand comes from the people who buy commodities. And they are called as consumers.

  1. What is supply?

Supply comes from the producers. Supply means the amount offered for sale at given price.

  1. Supply comes from the producer and it usually means about the amount that the producer is willing to offer for a sale of a product at a given price.
  2. Both the demand and supply depends on which factor?

Price

  1. What are the factors influencing demand?

Production technology, prices of factor of production, prices of other products, number of producers, future price expectations, taxes and subsidies, non-economic factors like natural calamities, war and epidemics.

  1. What is law of demand?

If price rises demand falls if demand rise price falls.

  1. What is Marshall`s law of demand?

The greater the amount to be sold, the smaller must be the price at which it is offered. In other words the amount demand increases with a fall in price and diminishes with a rise in price.

  1. What are the exemptions for demand law?

This law is not applicable for necessary goods like rice luxury goods like gold and diamond.

  1. What is supply?

As price of commodity rises the quantity supplied is extended and as the price of commodity falls the quantity supplied is contracted. This is called as law of supply.

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