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Supply & Demand
What is the Law of Demand and how does it relate to price and quantity?
The Law of Demand states that, ceteris paribus, as the price of a good rises, the quantity demanded falls, and vice versa, establishing an inverse relationship between price and quantity demanded.
What is the difference between a change in demand and a change in quantity demanded?
Change in demand shifts the curve; quantity demanded moves along it.
What is the Law of Supply and what relationship does it establish?
The Law of Supply states that, ceteris paribus, as the price of a good increases, the quantity supplied also increases, establishing a direct (positive) relationship between price and quantity supplied.
What does a rightward shift in the supply curve indicate?
An increase in supply at every given price level.
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