Three main economic theories.

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Economic Theory

In this Coursework there are three main economic theories which I am going to use and they are:

Demand

Demand is the quantity of goods and services that will be bought at any given price over a period of time.

The Law of Demand states that the lower the price the higher the quantity demanded, and the higher the price the lower the quantity demanded.

Demand is related to Price

Here is an example of how price and demand are related and how it is shown on a diagram

Demand Schedule

Diagram        

The demand curve slopes downwards from left to

                                                                 the right because of the law of demand.

                                                                 A movement along the demand curve is caused                                            

                                                                 by a change in the price itself.

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Demand and Income

Income also affects the level of demand for a good. Demand for a good rises when income rises and falls as income falls.

Diagram        Explanation of Diagram

        

                                              As income rises so does the demand ...

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