Principles of economics.

Added on - 03 Dec 2019

  • 9

    pages

  • 2432

    words

  • 36

    views

  • 0

    downloads

Showing pages 3 of 9
Principles ofeconomics
TABLE OF CONTENTSIntroduction......................................................................................................................................3A: Impact of increase In customers on equilibrium price and quantity of product........................3Impact of increase in customers on Equilibrium price and quantity...........................................3B. HOW CONSUMER PRICE INDEX MEASURE OF INFLATION IS CALCULATED INUK....................................................................................................................................................6Conclusion.......................................................................................................................................7References........................................................................................................................................82
INTRODUCTIONEconomics can be described as field of science that provide description of factors whichaffects production, consumption and distribution of goods and services. Present study is based onthe evaluation of basic principles of economics (Bold and Vega, 2003.). In this report,description will be provided regarding, impact of increase in consumers will be described on theequilibrium price and quantity of product. Further, computation of Consumer Prices Indexmeasure of inflation will be provided.A: IMPACT OF INCREASE IN CUSTOMERS ON EQUILIBRIUM PRICEAND QUANTITY OF PRODUCTEquilibrium can be defined as point of price at which supply and demand of quantity ofproduct is equal. At the point of equilibrium, there is no change in the price of product becausequantity supplied to the customers is equivalent to quantity provided by the customers (Brooks,2002). With the change in economic factors there is also change in the point of equilibrium. It isbecause; there is direct change in supply and demand point. This aspect can be noticed by thefollowing table:Table1: Changes in equilibrium prices due to demand curveShift in demand curveImpact on demandImpact on equilibrium pointTo the rightIncrease in demandEquilibrium point will beincreasedTo the leftDecrease in demandEquilibrium point will bedecreasedTable2: Changes in equilibrium prices due to supply curveShift in supply curveImpact on supplyImpact on equilibrium pointTo the rightIncrease in supplyEquilibrium point will bedecreasedTo the leftDecrease in supplyEquilibrium point will beincreasedImpact of increase in customers on Equilibrium price and quantityIn terms of economics, demand refers to the quantity of product or service desired by thebuyers. Quantity demanded is the amount of product at which customers are willing to buy by3