Thursday
July 31, 2014

Homework Help: Economis

Posted by Pallavi on Saturday, November 19, 2011 at 10:31am.

I have got an economics questions, and i did my personal revision by tying to work the question.

here is the question: using demand and supply analysis, explain the influence of the imposition of a maximum price and a minimum price on a product on price and quantity (10 marks).

My answer: Demand refers to the ability and willingness of a consumer to buy a particular product at a given time period. Demand should be backed up by the ability to pay for a particular product.

As the law of demand states that the other thing remaining the same: the higher of he price of a good, the smaller quantity demanded. Therefore if a maximum price is imposed on a product, the quantity demanded of that good will be lower though the price will remain high.With the maximum price imposed on the product which is represented in a graph, the effect on the graph would be, the dd curve will shift from D to D1.this will affect the quantity as it will decrease.

As for supply, it refers to the entire relationship between the price of a good or services and the quantity supplied. According to the law of supply, other thing remaining the same, it states that the higher the price,the higher quantity supplied. Therefore, if a maximum price is imposed on a product, it will result in a high quantity supplied. If a minimum price is imposed, it will have a low quantity supplied. The lower the price of a good,the lower quantity supplied.

Answer this Question

First Name:
School Subject:
Answer:

Related Questions

ECONOMICS - The relative price of personal computers has dropped drastically ...
ECONOMICS - The relative price of personal computers has dropped drastically ...
ECONOMICS - Need examples of topics dealing with 2 Economic Concepts.... Meaning...
health care economis - n terms of supply and demand, is price the only thing ...
Macro Economics - I am answering a mutiple choice question and there are two ...
MATHS - demand function for kerosene: Kd=a0+a1Pk supply function for kerosene: ...
Mircoeconomics: Elasticity - Please help! I have a mid-term test in a couple of ...
economics - 1. Suppose that the market of laptops is given by following supply ...
economics - in the simple economics of a competitive market price increase under...
economics - in the simple economics of a competitive market price increases ...

Search
Members