Understanding Demand and Trade Policy: Economics for Business

Running head: ECONOMICS FOR BUSINESS
Economics for business
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1ECONOMICS FOR BUSINESS
Table of Contents
Answer1:....................................................................................................................................2
Introduction:...............................................................................................................................2
Analysis:.....................................................................................................................................2
Conclusion:................................................................................................................................4
Answer 2:...................................................................................................................................4
Introduction:...............................................................................................................................4
Analysis:.....................................................................................................................................4
Conclusion:................................................................................................................................5
References:.................................................................................................................................6

2ECONOMICS FOR BUSINESS
Answer1:
Introduction:
Demand is a microeconomic concept where price of a product plays significant role to
determine the quantity demanded for it. This microeconomic theory helps to understand
about the change in quantity demanded and change in demand.
Analysis:
Price and quantity demanded has negative relationship, where increase in price leads
the quantity demanded for the product to decrease further and vice versa. In this situation,
other demand influencing factors like income and preference of consumers, price of other
related commodities and price of related commodities are considered as constant. When price
moves along a demand curve considering these demand-influencing factors as constant,
change in quantity demand occur (Sharifi et al., 2018). In addition to this, supply curve
represents a positive relationship between price and quantity of a product and the curve
possesses positive slope. Due to change in price, the market can experience excess supply or
excess demand.
Figure 1: Change in quantity demand
Source: (created by author)