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1. demand IS customer’s willingness and ability to buy a product or service at a particular time and place.

2. the Law of Demand says that the demand for an economic product varies inversely2with its price

3. if prices are high the quantities demanded will be low. If prices are low the quantities demanded will be high

4. demand elasticity explains how much a change in price affects the quantity demanded.

5. demand is elastic when a change in price causes a big change in the quantity demanded.

6. demand is inelastic when a change in price causes only a small change in the quantity demanded.

7. demand is influenced by prices, supply and people`s wants and needs.

8. supply means the quantity of a product supplied at the price prevailed at the time.

9. The law of supply states that the quantity of an economic product offered for sale varies directly with its rice

10. If prices are high suppliers will offer greater quantities for sale. If prices are low, they will offer smaller uantities for sale.

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12. To make the decision-making process4easier coscts divided into such categories : Fixed cost, Variable cost, total cost,marginal cost

13. Prices play an important role in all economic markets. If there were no price system, it would be impossible to determine a value for any goods or services.

14. In a market economy prices act as signals and Prices serve as a link between producers and consumers

15. Prices, especially in a free market system, are also neutral. That is, they favour neither the producer nor consumer.

16. The buyers come to the market larger to pay low prices. The sellers come to the market hoping for high prices.

17. adjustment process must take place when the two sides come together

18. market equilibrium4isa situation where prices are relatively stable and there is neither a surplus5nor a shortage6in the market

19. A high price, for example, is a signal for producers to produce more and for buyers to buy less. A low price is a signal for producers to produce less and for buyers to buy more


Date: 2014-12-21; view: 981

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