qd = f(p) in identity the independent variable in it?
Answers
VARIABLES AND RELATIONSHIPS
Reality is very complex, and economists, like other scientists, use models to analyze reality. A model is a simplified version of the real world and only includes the elements that we believe are the most important. For example, we think that prices are the most important factor in determining the demand for bread. We also think that income and population are important. Other economic factors will be left out of the model.
Each of these elements of a model is a variable. Our model for the demand for bread has four variables: (1) the quantity of bread demanded, (2) the price of bread, (3) the income of consumers, and (4) the number of consumers. Each variable can be expressed by numbers.
The dependent variable is the tail of the dog -- its number value depends on the number values of the other variables. In our model, the dependent variable is the quantity of bread demanded (#1). The other three variables are the independent variables and their number values, taken together, will determine the quantity of bread that consumers want to buy.
Models can be expressed using mathematical notation. We often use y for the dependent variable and x for the independent variables. We use f to represent the actual mathematical relationship (usually a linear polynomial).
y = f (x)
In the demand for bread, we would use Qd for quantity demanded, P for price, Y for income, and N for population. The + and - signs show direct and inverse relationships.
Qd = f (-P,+Y,+N)
Among the independent variables, the price of bread (#2) is the most important, so we match the quantity (#1) and price (#2) variables together in tables and graphs. The table containing these numbers is called a schedule, and the graph of these numbers is called a curve. Since we are not including income and population, we have to assume that these variables don't vary! We call this condition "ceteris paribus" which means that income and population are held constant. If income changes, for example, we will need a new set of quantity numbers for our schedule, and the location of our curve will change.
The relationship of the dependent variable and each of the independent variables can be direct or inverse. In a direct relationship, a higher value of the independent variable is related to a higher value of the dependent variable (or vice-versa). Mathematically, a direct relationship is also a positive relationship.
In an inverse relationship, a higher value of the independent variable is related to a lower value of the dependent variable (or vice-versa). Mathematically, an inverse relationship is also a negative relationship. [The word "indirect" does not mean inverse!]
In our example, the quantity of bread demanded (#1) is inversely related to the price of bread (#2). These two variables are used for the demand schedule and the demand curve. In the schedule, higher values of price are linked to lower values of quantity demanded. In the demand curve, the curve will slope downward to the right (a "negative" slope). When there is a change in price, we say there has been a "change in the quantity demanded".
The demand for bread is directly related to income (#3). If income takes higher values, then the demand for bread will also take higher values. In the demand schedule, the quantity demanded at each price will be higher. In the demand curve, the quantity demanded will be further to the right at each price level. We say that there is an "increase in demand" and "the curve shifts to the right". If income takes lower values, the process is reversed. We say that there is a "decrease in demand" and "the curve shifts to the left". We call these shifts in the demand curve a "change in demand". [The demand for bread is also directly related to changes in population (#4).]
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Answer:
independent variable is "p"
Explanation:
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