Complete the following Include your references using APA for

Complete the following. Include your references using APA formatting. Write the definition for each of the following: 1. Law of Demand 2. Law of Supply 3. Price Elasticity of Demand 4. Macroeconomics 5. Microeconomics Identify 2 Products whose demand is price elastic. Identify 2 products whose demand is price inelastic. Which of the following graphs best demonstrates the law of demand? a) I b) II c) III d) IV Which of the following graphs best demonstrates the law of supply? a) I b) II c) III d) IV

References

Solution

Price Elasticity of Demand

Price Elasticity of Demand is a measure of degree of responsiveness of demand for a commodity to change in its price. In other words, the price elasticity of demand quantifies the effect of a change in its own price on the quantity demanded.

Law of demand

It states that there is an inverse relationship between the price of a commodity and its quantity demanded assuming all other factors affecting demand remain constant. It means that when the price of goods falls, the demand for the goods rises and when the price rises the demand falls.

Law of Supply

Law of supply states that other things remaining constant, there is direct relationship between the price of a commodity and its quantity supplied. The quantity supplied of a commodity rises with the rise in its price and falls with fall in price

Microeconomics

Microeconomics is that branch of economics which deals with the behaviour of individual units or small group of individuals. In other words, in microeconomics we study the behaviour of consumers, firms, industries and markets etc.

Macroeconomics

Macroecnomics is that branch of economics which studies the economy as whole and its aggregate such as national income, level of employment etc.

Products whose demand is price elastic:-

Demand for luxury goods is elastic. For example, car, fridge.

Products whose demand is price inelastic.

Demand for essential goods is inelastic. For example, medicines, food items etc.