2.1 Demand And Supply

Question 1

Definition of demand

Answer 1

The quantity of a product a consumer is willing and able to buy at different prices per period of time ,other things being equal

Question 2

Individual demand

Answer 2

It shows the relationship between quantity demanded and price of a good or service of a single individual

Question 3

Market demand

Answer 3

The total demand which is the sum of quantities demanded by all individuals at different prices per period levels for a particular product in the markets for a period of time

Question 4

Non price determinants of demand

Answer 4

1. Changes in price of related goods
2. Consumers income
3. Consumers expectation of future prices
4. Taste and preferences

Question 5

Supply

Answer 5

The quantities of a product that suppliers are willing and able to sell at various prices per period of time, other things remaining constant

Question 6

Market supply

Answer 6

Total supply of a product by all firms at a given time frame and at different prices levels

Question 7

Changes in non price factors affecting supply

Answer 7

1. Changes in cost of production
2. Changes in technology
3. Changes in government policy
   Eg : indirect taxes, subsidies
4. Producers expectation of future prices