ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The concept of supply and demand is used to explain how price is influenced by the supply of goods and services available and the consumer demand for those products. When supply decreases, the price of the good increases. Inversely, when the supply of the good increases, the price falls.

Detailed explanation-2: -Answer and Explanation: When the supply is low, and demand is high, the equilibrium price will rise. Market equilibrium exists when demand and supply are in balance.

Detailed explanation-3: -The higher the price, the higher the quantity supplied. Lower prices mean reduced supply, all else held equal. Higher prices give suppliers an incentive to supply more of the product or commodity, assuming their costs aren’t increasing as much. Lower prices result in a cost squeeze that curbs supply.

Detailed explanation-4: -The law of supply and demand states that when the demand for a good or service is higher than the supply, prices are likely to rise. In these circumstances, suppliers tend to produce more to satisfy the demand and take advantage of the margin opportunities.

Detailed explanation-5: -Supply is generally considered to slope upward: as the price rises, suppliers are willing to produce more. Demand is generally considered to slope downward: at higher prices, consumers buy less.