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    Supply, Demand and their Determinants

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    Consider the law of demand and the determinants of demand, the law of supply and the determinants of supply, describe efficient markets theory & explain surplus and shortage. Create a graph illustrating the movement between the two equilibrium points.

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    The law of demand:

    The law of demand states that as price of commodity or product goes up, the quantity demanded for it goes down and vice versa. There is an inverse relationship between price and quantity demanded.

    The law of supply:
    The law of supply states that as price of commodity or product goes up, the quantity supplied for it goes up also and vice versa. There is, therefore, a direct relationship between supply and demand.

    The Determinants of Demand:
    The Determinants of Demand are price, income, prices of interrelated commodities, tastes, and ...

    Solution Summary

    The solution shows the discussion of and shortage, the law of demand, supply and their determinants. There is also a brief discussion of the efficient markets theory, as well as a graph included.