ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Economists call this positive relationship between price and quantity supplied-that a higher price leads to a higher quantity supplied and a lower price leads to a lower quantity supplied-the law of supply.

Detailed explanation-2: -A change in quantity demanded is represented as a movement along a demand curve. The proportion that quantity demanded changes relative to a change in price is known as the elasticity of demand and is related to the slope of the demand curve.

Detailed explanation-3: -Change in Supply can be caused due to changes in technology, machinery usage or development of better and efficient methods of production. An increase in competition in the market also affects Supply. Changes in the price of raw materials or other inputs of production affect Supply.

Detailed explanation-4: -If the price goes up, the quantity demanded goes down (but demand itself stays the same). If the price decreases, quantity demanded increases. This is the Law of Demand. On a graph, an inverse relationship is represented by a downward sloping line from left to right.

Detailed explanation-5: -A change in quantity supplied is a movement along the supply curve in response to a change in price. A change in supply is a shift of the entire supply curve in response to something besides price.