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Economics Assignment Demand and Supply Forces and Equilibrium

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abu dhabi school of management

   

Added on  2020-04-21

Economics Assignment Demand and Supply Forces and Equilibrium

   

abu dhabi school of management

   Added on 2020-04-21

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Running head: ECONOMICS ASSIGNMENT Economics AssignmentName of the StudyName of the UniversityAuthor Note
Economics Assignment Demand and Supply Forces and Equilibrium_1
1ECONOMICS ASSIGNMENT Table of ContentsAnswer 1:.........................................................................................................................................2Answer 2:.........................................................................................................................................4Answer 3:.........................................................................................................................................8References......................................................................................................................................11
Economics Assignment Demand and Supply Forces and Equilibrium_2
2ECONOMICS ASSIGNMENT Answer 1: Introduction The very basic of transaction of any kind of goods and services in the market are the factsthat it is impossible for each person in the economy to produce all the products which they wantto consume. Along with this, it is also evident that specialization in the production of acommodity increases the cost effectiveness and efficiency of production, which results in thecommodity being produced at a larger scale. The demand and supply forces determine the dynamics in the market. The point wherethese two reach a mutual agreement is known as the equilibrium point in the market. Thus, anychange in the demand and supply leads to a change in the response of the buyers and sellers,which in turn changes the equilibrium point. Graphs Figure 1: Demand and Supply Forces and Equilibrium
Economics Assignment Demand and Supply Forces and Equilibrium_3
3ECONOMICS ASSIGNMENT (Source: As created by the author)Figure2: Change in supply due to oil production fall(Source: As created by the author) Discussion The demand curve shows the willingness to buy of the buyers, backed by the purchasingpower of the buyers, at different level of prices. On the other hand, the supply curve shows thewillingness of the sellers to sell their goods and services at various price levels. The equilibriumoccurs at the situation where the supply and demand curve intersects each other. Figure 1 showsthis interaction between the demand and supply curves and the equilibrium occurs at the point E,where the buyers and sellers reach to a mutual agreement (Arrow 2015).
Economics Assignment Demand and Supply Forces and Equilibrium_4

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