Question

In microeconomics, price helps determine both quantity supplied and quantity demanded. Which other factors also help determine each? Quantity supplied is determined by production costs, and quantity demanded is determined by desire for the product. Quantity supplied is determined by production costs, and quantity demanded is determined by producer behavior. Quantity supplied is determined by consumer behavior, and quantity demanded is determined by aggregate demand. Quantity supplied is determined by producer behavior, and quantity demanded is determined by desire for the product

Answer 1

Answer :- First option is correct.

Microeconomics is the study of psychology of individuals at small scale.

In microeconomics, price of goods helps to determine the quantity supplied and the quantity demanded.

Quantity demanded is determined by

1. Desire of any good 2. Willingness to buy that good 3.Ability to buy a good

Other than that quantity supplied is determined by

1.Production cost [supply can increase with decrease in cost of production]

2. Productivity [supply can increase with increase in number of workers or hard working workers]

3.Technology[supply can increase with increase in the use of new technology related to production]

4.Govt regulation [it can either restrict or advertise the goods that can either increase or decrease the supply of that good respectively.]

5.Taxes and subsidies [implication of taxes can decrease the supply but by implication of subsidies supply can increase]etc.

So, Ist option is correct that the quantity supplied is determined by production cost and quantity demanded is determined by desire for the product.