Quantity Demanded Is The Amount (Number of Units) of A Product That A Consumer Would Buy in A Given Time Period If It

WHAT IS DEMAND?

Demand in terms of economics may be explained as the consumers’ willingness and ability to purchase or consume a given
item/good.
For instance, an increase in the price of a good will lead to a decrease in the quantity that may be demanded by consumers.
Similarly, a decrease in the cost or selling price of a good will most likely lead to an increase in the demanded quantity of the
goods.
This indicates the existence of an inverse relationship between the price of the article and the quantity demanded by
consumers. This is commonly known as the law of demand and can be graphically represented by a line with a downward
slope. The graphical representation is known as the demand curve.
• Quantity demanded is the amount (number of units) of a product that a consumer would buy in a given time period if it
could buy all it wanted at the current market price.
DEMAND SCHEDULE – is a table showing how much of a given product a household would be willing to buy at different
prices. Other factors that may affect the quantity demanded, such as the prices of other goods, are held constant in
drawing up the demand schedule.
Qd =independent b = slope of the function, inverse of the slop, measuring
a = Q-intercept, quantity demanded when the price is 0 the change in Q resulting from a particular change in price
P = independent
 A demand schedule can be derived by simply plugging in the price at each point to the demand function in getting the
values of quantity demanded.
DEMAND CURVE – is a graph illustrating how much of a given product a consumer would be willing to
buy at different prices.
• Demand curves are usually derived from demand schedules.
• It is typically downward sloping.
• This curve tells us what the QD would be at any particular price.
• It describes the negative relation between the price of a good and the quantity that consumers want to buy at a given
price.
• This downward sloping property of the demand curve is referred to as the law of downward sloping demand.
• Thus, greater quantity will be demanded when the price is lower, and when the price of the goods increases, buyers tend
to buy less of them.
A CHANGE IN DEMAND versus A CHANGE IN QUANTITY DEMANDED
• A change in demand is not the same as a change in quantity demanded.
CHANGE IN QUANTITY DEMANDED refers to a movement along the demand curve, which is caused only by a chance
in price. In this case, the demand curve doesn’t move; rather, we move along the existing demand curve.
CHANGE IN DEMAND refers to a shift in the entire demand curve, which is caused by a variety of factors (preferences,
income, prices of substitutes and complements, expectations, population, etc.). In this case, the entire demand curve moves left
or right.
• Changes in determinants of demand, other than price, cause a change in demand, or a shift of the entire demand curve,
from DA to DB.
• When demand shifts to the right, demand increases. This causes quantity demanded to be greater than it was prior to
the shift, for each and every price level.
•

Key Differences Between Demand and Quantity Demanded

1. Demand is defined as the willingness of buyer and his affordability to pay the price for the economic good or
service. Quantity Demanded represents an exact quantity (how much) of a good or service is demanded by
consumers at a particular price.
2. Demand refers to the graphing of all the quantities that can be purchased at different prices. On the contrary,
quantity demanded, is the actual amount of goods desired at a certain price.
3. When a person talks about increase or decrease in demand, it means the change in demand. Conversely, if a
person talks about expansion or contraction of demand, he refers to the change in quantity demanded.
4. Changes in demand are due to the factors other than price, i.e. income, the price of complementary goods, the
price of substitutes, etc. On the other hand, changes in quantity demanded is due to price.
5. Change in demand will result in the shift in the demand curve. As opposed to quantity demanded, where the
change may lead to the movement along the demand curve.
WHAT IS SUPPLY?
In economics, we have two forces: the producer, who makes things, and the consumer, who buys them. Supply is the
producer's willingness and ability to supply a given good at various price points, holding all else constant. An increase in
price will increase producers' revenues, so they'll be willing to supply more; a decrease in price will reduce revenues, and
so producers will supply less.
Supply's counterpart is demand; it measures how many consumers will want to buy a product at various price points. The
direct relationship between price and quantity supplied of a good is known as the Law of Supply and is typically
represented by an upward sloping line known as the supply curve.
Supply is the willingness and ability of producers to create goods and services to take them to market. Supply is positively
related to price given that at higher prices there is an incentive to supply more as higher prices may generate increased
revenue and profits.
QUANTITY SUPPLIED
The quantity supplied is the amount of a good that would be supplied to the market at a given price. In other words, it's
the quantity that appears when we check the supply curve at a specific price point. For Paso or Robles wineries, the
quantity supplied at a given price is how much wine they'd be willing to make if they knew they could charge that price.
• Quantity supplied represents the number of units of a product that a firm would be willing and able to offer for
sale at a particular price during a given time period.
LAW OF SUPPLY
• The law of supply states that there is a positive relationship between price and quantity of a good supplied.
• There is a direct relationship between the price of a particular good or service and the quantity that producers are
willing and able to supply.
• This means that the higher the price of certain good and service, the higher the quantity supplied. This is because
producers tend to supply more at higher price because it could give them more profit.
According to the law of supply, there is a direct relationship between supply and the price of a product or service under
ceteris paribus assumption (i.e. other things being equal).
Law of supply states that the quantity of a product or resource made available for sale by a producer or a resource owner
varies directly with the price of the product or resource respectively provided that other things remain constant.
It is important to note that supply is affected by a number factors in addition to price and the law of supply applies only
under the assumption that other things remain constant.
In other-words, it can be said that—”Higher the price higher the supply and lower the price lower the supply.”
The law thus suggests that the supply varies directly with the change in price. So, a larger amount is supplied at a higher
price that at a lower price in the market.
VALIDITY OF THE LAW OF SUPPLY
Just like the law of demand, the law of supply is only correct if the assumption of ceteris paribus is applied.
(Latin phrase ceteris paribus – literally, “holding other things constant” – is commonly translated as “all else being
equal.”)Law of supply assumes that all else is held constant when the price changes.

Quantity Demanded Is The Amount (Number of Units) of A Product That A Consumer Would Buy in A Given Time Period If It

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Quantity Demanded Is The Amount (Number of Units) of A Product That A Consumer Would Buy in A Given Time Period If It

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WHAT IS DEMAND?

Key Differences Between Demand and Quantity Demanded

VALIDITY OF THE LAW OF SUPPLY

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