Transcription of CHAPTER 3 DEMAND AND SUPPLY - Cengage
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CHAPTER 3 DEMAND AND SUPPLY - Cengage
37 CHAPTER 3 DEMAND AND SUPPLY CHAPTER in a Nutshell How are prices determined? This is the basic question we explore in this CHAPTER . Let's conclude before we start our analysis of price determination: Price depends on DEMAND and SUPPLY . That's it. But what's DEMAND and what's SUPPLY ? DEMAND represents people's willingness to buy goods and services at different prices. Price is a reflection of how willing people are to buy goods and services. SUPPLY can be interpreted similarly. SUPPLY represents the willingness of producers to SUPPLY goods and services at different prices. However, SUPPLY depends on the time frame being considered to a greater extent than does DEMAND . Producers can better adjust to changes in the market given more time.
Concept Check — See how you do on these multiple-choice questions. With this question, be careful to keep separate in your mind the difference between a change in quantity demanded and a change in demand.
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