Define both demand and supply

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Demand and Supply                Elton Chan 11EC3

Define both demand and supply

Demand is the quantity of a good or service that consumers have actually purchased at various price levels, in a period of time.

Supply refers to the quantity of a good or service that all firms in an industry are able to offer for sale at different price levels, in a period of time.

Explain the distinction between an extension/construction and an increase/decrease in demand and supply

Expansions/contractions in demand occur when there is a price change for the good in question. It leads to movements along the demand curve.

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An increase/decrease in demand leads to a shift in the demand curve. These shifts are brought about by changes in the other conditions affecting consumer demand, and not price changes.

The distinction between an increase/decrease and expansion/contraction of supply is the same. An expansion/contraction in demand occurs when there is a price change and leads to movement along the supply curve. An increase/decrease of supply occurs when there are changes in the other conditions affecting consumer demand, other then price changes and leads to a shift in ...

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