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DEMAND, SUPPLY & MARKET EQUILIBRIUM (MARKET EQUILIBRIUM (Analyzing…
DEMAND, SUPPLY & MARKET EQUILIBRIUM
Law of Demand
The law of demand had stated that, when the price of goods and services increase the quantity demanded of goods and services will decrease.
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The demand schedule & the demand curve show the relationship between the price of goods and services and the quantity demanded.
The movement of the demand curve is caused by the consumer income, prices related to goods and services, tastes, expectation, and number of buyers.
A shift in the demand curve are either left or right depends on the changes of price,change in demand, consumer income, and prices related goods
Law of Supply
The law of supply had stated that, when the price of goods and services increase the quantity supplied of goods and services will increase.
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The supply schedule & the supply curve show the relationship between the price of goods and services and the quantity supplied.
The movement of the supply curve is caused by the input price, technology, , expectation, and number of sellers.
The law of supply had stated that, when the price of goods and services increase the quantity supplied of goods and services will increase.
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MARKET EQUILIBRIUM
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Surplus Price (P) > Equilibrium price (E0), then Qd > Qs
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Shortage Price (P) < Equilibrium price (E0), then Qd > Qs
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