Question

Interaction of market demand and supply of a good determine

Answer 1

•The interaction of buyers and sellers in the market helps to determine the market price, thereby allocating scarce goods and services efficiently.

•This law states that with all else equal, when the price of a good rises, the quantity demanded falls – and when the price falls, the quantity demanded rises.

•If demand increases (decreases) and supply is unchanged, then it leads to a higher (lower) equilibrium price and quantity.
• If supply increases (decreases) and demand is unchanged, then it leads to a lower (higher) equilibrium price and higher (lower) quantity.

REGARDS

Answer 2

Explanation:

The law of demand says that at higher prices, buyers will demand less of an economic good. The law of supplysays that at higher prices, sellers willsupply more of an economic good. These two laws interact to determinethe actual market prices and volume of goods that are traded on a market.