{"id":5377,"date":"2019-02-14T09:37:38","date_gmt":"2019-02-14T04:07:38","guid":{"rendered":"http:\/\/astan.lk\/al_virtualclassroom\/?p=5377"},"modified":"2019-02-16T10:00:11","modified_gmt":"2019-02-16T04:30:11","slug":"price-and-quantity-demanded","status":"publish","type":"post","link":"https:\/\/astan.lk\/al_virtualclassroom\/price-and-quantity-demanded\/","title":{"rendered":"Price and quantity demanded"},"content":{"rendered":"<p>Analyze the inverse relationship between price and quantity demanded when other factors remain constant at a certain time.<\/p>\n<h3>\n<span style=\"color: #000000;\"><strong>Analyze the law of demand in the following ways.<\/strong><\/span><\/h3>\n<ul>\n<li><span style=\"color: #000000;\">Demand schedule<\/span><\/li>\n<li><span style=\"color: #000000;\">Demand curve<\/span><\/li>\n<li><span style=\"color: #000000;\">Demand equation<\/span><\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<ul>\n<li>When other factors remain constant and at a certain period of time the table which show the quantities demanded at various price is called demand schedule., the list of number are called demand schedule<\/li>\n<li>At a certain time when other factors remain constant, the curve which combined all the points of quantities demanded at various prices of the considering good is the demand curve.<\/li>\n<li>When other factors remain constant, the equation which explains the inverse relationship between the price of considered goods and the quantity demanded is the demand equation.<\/li>\n<li>When other factors remain constant, the demand curve has a negative slope due to the inverse relationship between price of the good and quantity demanded.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h3>\n<span style=\"color: #000000;\"><strong>The three determinants of the inverse relationship between the price of the\u00a0<\/strong><strong>good and quantity demanded, are<\/strong><\/span><\/h3>\n<ul>\n<li><span style=\"color: #000000;\">Income effect<\/span><\/li>\n<li><span style=\"color: #000000;\">Substitution effect<\/span><\/li>\n<li><span style=\"color: #000000;\">The change in real income of individuals as the change in the price of goods at a<\/span><br \/>\n<span style=\"color: #000000;\"> certain time, when other factors remain constant is known as income effect.<\/span><\/li>\n<\/ul>\n<h3>\n<span style=\"color: #000000;\">The substitution effect could be explained as below.<\/span><\/h3>\n<ul>\n<li><span style=\"color: #000000;\">Assume that the other factors except price of the good remain constant<\/span><br \/>\n<span style=\"color: #000000;\"> (including the price of substitution goods)<\/span><\/li>\n<li><span style=\"color: #000000;\">In this type of situation, the quantity demanded of that good would be increased or decreased on the change of comparative price that resulted from increase or decrease of the price of the considered good.<\/span><\/li>\n<li><span style=\"color: #000000;\">This is the substitution effect. (Explain with an example).<\/span><\/li>\n<li><span style=\"color: #000000;\">As the marginal utility decreases when consumption increases, the consumers are<\/span><br \/>\n<span style=\"color: #000000;\"> willing to consume more goods only if they are charged less. Therefore the demand<\/span><br \/>\n<span style=\"color: #000000;\"> increases when the price decreases.<\/span><\/li>\n<\/ul>\n<h3>\n<span style=\"color: #000000;\"><strong>Contradictions of the law of demand.<\/strong><\/span><\/h3>\n<ul>\n<li><span style=\"color: #000000;\">Giffen goods<\/span><\/li>\n<li><span style=\"color: #000000;\">Prestigious consumption<\/span><\/li>\n<li><span style=\"color: #000000;\">Goods which represent the quality by price.<\/span><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Analyze the inverse relationship between price and quantity demanded when other factors remain constant at a certain time. Analyze the law of demand in the following ways. Demand schedule Demand curve Demand equation &nbsp; When other factors remain constant and at a certain period of time the table which show the quantities demanded at various [&hellip;]<\/p>\n","protected":false},"author":842,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[54,2681],"tags":[],"class_list":["post-5377","post","type-post","status-publish","format-standard","hentry","category-economics","category-unit-2-en"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.9 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Price and quantity demanded - Learning &amp; Education Portal<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/astan.lk\/al_virtualclassroom\/price-and-quantity-demanded\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Price and quantity demanded - Learning &amp; Education Portal\" \/>\n<meta property=\"og:description\" content=\"Analyze the inverse relationship between price and quantity demanded when other factors remain constant at a certain time. 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