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How to use the law of market forces of demand to explain the changes in the price and quantity of crude oil on the three occasions?
The law of market forces state that when there is a surplus, the price falls. If you notice recently that the price for gasoline is lower than usual, it is because the natural forces in market economy are trying to combat the surplus of crude by having gas available at lower prices. This is alarming to the ministers of OPEC, who want the highest prices for their barrel, but more convenient to the consumers who are only willing and able to purchase gasoline if the prices are low, given the current economic recession. The surplus occured because consumer demand for gasoline has dramatically decreased, although OPEC suppliers were producing at the regular rate. So instead of decreasing prices lower to balance demand, which would hurt oil suppliers, OPEC has decided to cut oil production by 1.5 million barrels per day. I had to do my economic homework on this subject and I pretty much think that I've got it down to a science here. Hopefully it wasn't too confusing.
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To describe explain and predict changes in the price and quantity of goods sold?
Laws of Supply and Demand explain and predict changes in the price and quantity of goods sold.
How do changes in demand differ from changes in quantity demanded?
Changes in demand refer to shifts in the entire demand curve due to factors like consumer preferences, income, or population. Changes in quantity demanded, on the other hand, refer to movements along the demand curve in response to changes in price.
What changes the equilibrium quantity to change?
It changes when the market demand and or market supply changes.
What are the key differences between inelastic demand and elastic demand in economics?
In economics, inelastic demand means that changes in price have little impact on the quantity demanded, while elastic demand means that changes in price have a significant impact on the quantity demanded.
When the quantity sold of a good changes significantly in response to changes in price its demand is?
highly elastic
When the quantity sold of a good changes significantly in response to changes in price its demand?
highly elastic
What is the difference between a demand curve and a demand schedule, and how do they each represent the relationship between price and quantity demanded in economics?
A demand curve is a graphical representation of the relationship between price and quantity demanded, showing how the quantity demanded changes as the price changes. A demand schedule, on the other hand, is a table that lists the quantity demanded at different prices. Both the demand curve and demand schedule illustrate the law of demand, which states that as the price of a good or service decreases, the quantity demanded increases, and vice versa.
What is the price of elasticity of demand?
The responsiveness of quantity demanded to changes in the price of a good
If quantity demanded is completely unresponsive to changes in price demand is?
perfectly inelastic
How can one calculate the elasticity of demand from a demand function?
To calculate the elasticity of demand from a demand function, you can use the formula: elasticity of demand ( change in quantity demanded) / ( change in price). This formula helps determine how responsive the quantity demanded is to changes in price.
What is demand side?
When the price changes, we call the resulting change in buying plan a Change in the quantity of demand. On the other hand, Change in demand is a change in the quantity that people plan to buy when any influence on buying plans other than the price of good changes.
Is the degree of responsive with which quantity demanded changes due to changes in the price of a product?
Yes. Imagine you are in the market to buy a sports car. A $100 increase in price is not likely to affect the quantity you will demand. However, if you are in the market for bananas a $100 increase in price will definitely affect the quantity you will demand.
