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Is demand needed in equilibrium?
Yes. Equilibrium is created at the intersection of the Demand curve and Supply Curve. Equilibrium can be shifted if the Demand curve increases or decreases, and the same happens when the Supply curve increases or decreases. Without demand, you would just have a Supply curve.
If marginal revenue product capital increases the demand or supply curve?
Demand.
Why does price decrease as demand decreases?
It does not. If you follow the demand curve it shows that as price decreases, demand increases.
Demand curve of a giffen good?
A Giffen good is a good whose consumption increases as its price increases. (For a normal good, as the price increases, consumption decreases.) Thus, the demand curve will be upward instead of downward sloping.A giffen good has an upward sloping demand curve because it is exceptionally inferior. It has a strong negative income elasticity of demand such that when a price changes the income effect outweighs the substitution effect and this leads to perverse demand curve.
Relationship between Marginal revenue and Demand curve?
marginal revenue always lies behind the demand curve,and when demand increases marginal revenue also increases.demand curve is used to determine price of a commodity.
Is demand needed in equilibrium?
Yes. Equilibrium is created at the intersection of the Demand curve and Supply Curve. Equilibrium can be shifted if the Demand curve increases or decreases, and the same happens when the Supply curve increases or decreases. Without demand, you would just have a Supply curve.
If marginal revenue product capital increases the demand or supply curve?
Demand.
What does the demand curve state?
As price (on the horizontal) increases, demand (on the vertical) will decrease.
Why does price decrease as demand decreases?
It does not. If you follow the demand curve it shows that as price decreases, demand increases.
Demand curve of a giffen good?
A Giffen good is a good whose consumption increases as its price increases. (For a normal good, as the price increases, consumption decreases.) Thus, the demand curve will be upward instead of downward sloping.A giffen good has an upward sloping demand curve because it is exceptionally inferior. It has a strong negative income elasticity of demand such that when a price changes the income effect outweighs the substitution effect and this leads to perverse demand curve.
Relationship between Marginal revenue and Demand curve?
marginal revenue always lies behind the demand curve,and when demand increases marginal revenue also increases.demand curve is used to determine price of a commodity.
Why demand curve slopes downward?
Demand curve is slope downward because of inverse relationship between price and quantity.
What is represented by a shift in the demand curve?
A shift in the demand curve shows either an increase or a decrease in demand. If more people suddenly start buying an item, their demand for it increases and the curve will shift. Likewise, if people stop buying a product the curve will also shift, but in the opposite direction.
Demand curve slopes downwards from left to right. this is the negative slope that shows the inverse relationship between price and demand. explain why does the demand curve slope downwards?
because demand decreases as price increases :)
Why do increases and decreases in quantity of demand not shift the position of the demand curve?
Increases and decreases in quantity demanded are movements along the demand curve, not shifts of the curve itself. These changes occur in response to price fluctuations, reflecting the law of demand, which states that as price decreases, quantity demanded increases, and vice versa. In contrast, shifts of the demand curve result from changes in non-price factors such as consumer preferences, income, or the prices of related goods, which alter demand at every price level. Thus, while quantity demanded changes with price, the underlying demand curve remains in place unless these other factors change.
How the slope of the demand curve can be explained by the principle of marginal utility?
The demand curve is negatively sloped because it is based on the principle of marginal utility and this utility decreases as consumption increases. The demand price which depends on the marginal utility of a good also declines as consumption increases, so quantity and price are inversely related, leading to the negative curve and the law of demand.
What does a downward sloping demand curve signify in economics?
A downward sloping demand curve in economics signifies that as the price of a good or service decreases, the quantity demanded by consumers increases.
