Essay about Economics Holds Many Theories And Laws
The subject of economics holds many theories and laws. One such theory is that of supply and demand. Supply and demand has shown to be a fundamental of economics, explaining a large portion of business and corporation affairs; it is the main support of the market economy. The theory of supply and demand describes the relationship between the supply of a product and the demand for that product. In other words, the law shows the effect that the desire for a product has on its set price.
The law is expressed through the variables of quantity and price. The demand of a product refers to the amount of desire to buy a product at a given price. The demand relationship is known as the relationship between the price and the quantity demanded. The supply of a product alludes to the amount of actual product being produced when receiving a certain price. The supply relationship is defined as the correlation between the amount of a product produced and price it sells for. The economic curve of demand is represented with a negative slope, which demonstrates that if the price of a good increases, the quantity produced will decrease due to less desire for that good. This is true for almost all goods because once a certain price for a product is exceeded, people can find cheaper replacements or do without. The law of supply demonstrates a positive slope, which indicates that with a higher price comes a higher quantity produced.
The equilibrium is the point at which the…