Chapter 3

Demand, Elasticity of Demand and Elasticity of Supply

After studying this chapter, you should be able to understand:

  • Quantity demanded of a good is the amount of that good demanded at a particular price over a certain time.
  • According to the law of demand, there exists a negative relationship between the quantity demanded of a good and the price of the good.
  • A change in demand or a change in the quantity demanded of the good is a movement, which occurs along the demand curve and is caused by a change in the price of the good, ceteris paribus.
  • A shift in the demand curve is caused by a change in any of the factors, which influence the demand other than the price of the good itself. It is important to note that there is a shift of the ...

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