Economics for Business: Demand and Protectionism Policy

Running Head: ECONOMICS FOR BUSINESS
Economics for Business
Name of the Student
Name of the University
Course ID

1ECONOMICS FOR BUSINESS
Table of Contents
Answer to question 1.......................................................................................................................2
Introduction..................................................................................................................................2
Analysis.......................................................................................................................................2
Conclusion...................................................................................................................................5
Answer to question 2.......................................................................................................................5
Introduction..................................................................................................................................5
Analysis.......................................................................................................................................6
Conclusion...................................................................................................................................8
Reference list...................................................................................................................................9

2ECONOMICS FOR BUSINESS
Answer to question 1
Introduction
Demand in economics represents willingness of buyers in support of the ability to pay the
market determined price of the concerned goods and service. The concept of quantity demanded
differs significantly from that of the change in demand. Former represents demand change due to
change in price while later is demand change results from factor except price (Nguyen & Wait,
2015).
Analysis
Change in quantity demanded
Change in quantity demanded is associated with a change in amount of commodity
demanded. Such change is indicated by a movement along the demand curve. Quantity
demanded of a commodity change in response to the change in own price of the product. The
direction of change in quantity demanded is explained by the law of demand. According to this
law, given all other factors constant demand of a good moves in opposite direction of price.
Quantity demand therefore increases with a decrease in price while demand decreases with
increase in price (Nicholson & Snyder, 2014). The increase in quantity demanded is known as
extension of demand and is indicated by a movement along the demand curve from left to right.
The decrease in the quantity demanded is called contraction of demand represented by the
movement on the demand curve from right to left.