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    1) The inverse relationship of the Law of Demand is supported by the law of diminishing marginal utility, income effect, and substitution effect. As price increases, consumers will buy less of a good due to these economic concepts. 2) Changes in the determinants of demand - taste, income, price of related goods, price expectations, and number of buyers - will affect demand for P&T Accounting Services. For example, an increase in income would likely lead to an increase in demand. 3) Given the supply and demand equations for a commodity, the equilibrium price is $6 and the equilibrium quantity is 20. Graphing the supply and demand curves shows their intersection at this price and quantity.

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    1) The inverse relationship of the Law of Demand is supported by the law of diminishing marginal utility, income effect, and substitution effect. As price increases, consumers will buy less of a good due to these economic concepts. 2) Changes in the determinants of demand - taste, income, price of related goods, price expectations, and number of buyers - will affect demand for P&T Accounting Services. For example, an increase in income would likely lead to an increase in demand. 3) Given the supply and demand equations for a commodity, the equilibrium price is $6 and the equilibrium quantity is 20. Graphing the supply and demand curves shows their intersection at this price and quantity.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    7 views1 page

    NBHHHM, M

    Uploaded by

    Angelica Eclise
    1) The inverse relationship of the Law of Demand is supported by the law of diminishing marginal utility, income effect, and substitution effect. As price increases, consumers will buy less of a good due to these economic concepts. 2) Changes in the determinants of demand - taste, income, price of related goods, price expectations, and number of buyers - will affect demand for P&T Accounting Services. For example, an increase in income would likely lead to an increase in demand. 3) Given the supply and demand equations for a commodity, the equilibrium price is $6 and the equilibrium quantity is 20. Graphing the supply and demand curves shows their intersection at this price and quantity.

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    © All Rights Reserved
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    of 1

    MANAGI

    eams
    General
    Seatwork #3 Analyzing Market Equilibrium
    Ct
    Questions:

    1. Prove that common sense,law of dininishing marginal utiliry,income and substitution


    effect supports the inverse relationship of the Law of Demand.Use graph or
    illustration to defend your answer(only if applicable).(20 pts)

    图
    Apps
    2.Using P&T Accounting Services as your subject commodity,explain how the changes
    in the determinants of demand (taste,income,price ofrelated goods,price expectation,
    and number of buyers)will affect the demand for P&T Accounting Services.(15 pts)

    3.Assume that demand for a commodity is represented by the equation P=10-0.2Qd and
    supply by the equation P=2+0.2Qs, where quantity demanded and supplied
    is, respectively,Qd and Qs.Using the equilibrium condition Qs =Qd,solve the
    equations to determine equilibrium price and equilibrium quantity.Graph the two
    equations to substantiate your answers if the market prices are 2,4,6,8,and 10.(25
    pts)

    New cowersali

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