Question

Smarthinking 2 Content Library Assessments Communication Re. Sep 8, 2019 - Sep 15, 2019 > Assignment #2 - Due Sep 10, 2019 5:00 Assignment #2 - Due . Prin of Micro Economics Section 01 Fall 2019 CO Microeconomics What are supply and demand curves? What happens when the supply is greater than the demand? Please give an example. What happens when the demand is greater than the supply? Please give an example Complete and post using MSWord. 2 Assignment #2 Due September 10 at 5:00 PM Type here to search @ $ 5 B e 9

Answer 1

Answer

✓ supply and demand curve:

In market, consumer demand determine the prices and quantities of products, and also the amount, suppliers are ready to provide such products or offerings. These two can be plotted in a graph, as two curves, determining the impact of increase or decrease of one element over the other, as a percentage or proportional change. When these two curves meet, they are said to be on equilibrium (when demand is equal to supply, at certain price and quantity provided on the graphs on X and y axis)

✓ when the supply is greater than the demand, it will lead to price decrease, because, there will excess products supplied to the market, which eventually lowers the price and it's demand. For example: if the agricultural produce viz, onions or tomatoes are supplied to the market more than the quantity needed, it will decrease it's prices to a greater extent. And it is no more demanded by the people for a time being.

✓ when demand is greater than supply, it will lead to increase in the prices of certain commodities or goods. Decreasing it's supply. For example: when the demand for fruits viz mango, in its season, increases, people would buy it for a higher price. It's supply will be short, as it is available at that time, and no excess can be supplied. Thus, price increase at an maximum level, unless the season ends and no one is ready to buy it.