Demand and Supply Model

Question 1

What assumptions do we make when we model supply and demand together

Answer 1

We assume that the goods represented in the demand and supply model must be identical. We also assume that all producers and consumers have complete knowledge about the good that they are buying/selling

Question 2

What are the preferences of the consumer represented by

Answer 2

the demand curve

Question 3

What are the preferences of the producer represented by

Answer 3

the supply curve

Question 4

Where is equilibrium in the demand-supply curve

Answer 4

at the meeting points of the two curves