# Rasmussen College Law of Supply and Demand Written Assignment

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### Question Description

The Law of Supply suggests as prices increase, quantity increases, as well. Or as prices decrease, quantity decreases, too. There is a direct relationship between price and quantity.

A change in quantity supplied implies there is movement from one point on the supply curve to another point on the supply curve.

A change in supply implies that the entire supply curve shifts to either the left or the right.

To determine, which direction the curve will shift, please refer to the following determinants of supply:

• Input costs
• Taxes
• Subsidies
• Technologies
• Other goods
• Other sellers

The Law of Demand suggests as prices increase, quantities decrease and as prices decrease, quantities increase. There is an inverse relationship between price and quantity.

A change in quantity demanded implies there is movement from one point on the demand curve to another point on the demand curve.

A change in demand implies the entire demand curve will shift to either the left or the right.

To determine, which direction the curve will shift, please refer to the following determinants of demand:

• Income
• Tastes
• Preferences
• Other goods
• Expectations

A market consists of both buyers and sellers. The equilibrium point is determined by the intersection of the supply and demand curve, which will dictate the equilibrium quantity and price.

The graph below was constructed by using the values in the table as references.

 Quantity Demanded Quantity Supplied Price 110 10 1 100 20 2 90 30 3 80 40 4 70 50 5 60 60 6 50 70 7 40 80 8 30 90 9 20 100 10 10 110 11

From the graph given above the equilibrium price is \$6.00 and the equilibrium quantity is 60 units.

Joshua receives a substantive increase in price, please illustrate on the graph given below a shift in the supply or a shift in demand curve. Please state whether price will increase or decrease and whether quantity will increase or decrease.

The demand curve will shift. Price and quantity will both increase.

If agricultural subsidies were cut, please illustrate on the graph below the direction or movement of the supply or demand curve. Please state whether the price will increase or decrease and whether quantity will increase or decrease.

The supply curve will shift to the left. Price will increase and quantity will decrease.

If expectations increase and taxes decrease, please illustrate the direction or movement of the supply and demand curves and state whether price will increase, decrease, or remain at the same level and state whether quantity will increase, decrease, or remain at the same level.

The supply and demand curves will both shift to the right. Price will be indeterminate (unchanged) and quantity will increase.

If input costs increase and income increases by the same proportion, please illustrate the direction or movement of the supply and demand curves and state whether price will increase, decrease, or remain at the same level and state whether quantity will increase, decrease, or remain at the same level.

Demand curve will shift to the right and the supply curve will shift to the left. Price is indeterminant (unchanged) and price will increase.

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Assignment 2
1. In two or more sentences define, the Law of Supply?
The law of supply states that the supply of one particular commodity increases as a result of
the increase in the price of that commodity. This indicates that the supply of goods and
services is directly proportionate to their prices.
2. In two or more sentences define, the Law of Demand?
The law of demand states that if all factors are kept constant, an increase in the price of
goods and services leads to a reduction in the demand for those particular goods and services.
Therefore, demand can be said to be inversely proportional to price.
3. Identify at least 4 determinants of supply?

Subsidies – when the government offers subsidies to the cost of production, prices
will reduce thus supply increases.
Technology – advanced technology increases the rate of production hence higher
output volume and increased supply.
Taxes – higher taxes increase the cost of factors of production; hence increasing the
prices of commodities and reducing supply.
Other similar goods – the availability of more substitutes for a specific product leads
to a reduction in supply.

4. Identif...

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Anonymous
Tutor went the extra mile to help me with this essay. Citations were a bit shaky but I appreciated how well he handled APA styles and how ok he was to change them even though I didnt specify. Got a B+ which is believable and acceptable.

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