Law of Demand and Law of Supply

Case study:
Demand and Supply Analysis, a brief preview
Willingness to have anything in exchange of money is called Demand. Normally, when price of a good rises, demand for it tends to decrease and vice-versa, other things remaining the same. But in case of a firm, it is quite opposite for normal goods and services. A firm goes to supply more as price of it rises and vice-versa, ceteris paribus. A consumer always responses to the price change of the good (s)he purchases, as a firms does regarding its production and supply of goods. Above discussed market forces Demand and Supply play important role to achieving equilibrium, i.e., a situation from where there is no tendency to move. Market equilibrium is achieved at the point where Demand and Supply are equal.
Answer the following case study questions:

1. State the Law of Demand and law of Supply.
2. Define Elasticity of Demand and Elasticity of Supply.
3. Explain the concept of Market Equilibrium diagrammatically. Also identify equilibrium price and equilibrium quantity in the same diagram.

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