Question

Suppose that a market is described by the following supply and demand equations: qs = 2p qd = 180−p. Economists use the term demand to refer to:

a. Quantity supplied at a certain price
b. Quantity demanded at a certain price
c. Price at which quantity supplied equals quantity demanded
d. Price elasticity of demand

Answer 1

In economics, demand refers to the quantity demanded at a certain price, depicted by the demand curve, whereas price elasticity of demand measures how quantity demanded responds to price changes.

Step-by-step explanation:

In economics, the term demand refers to the quantity demanded at a certain price. This is illustrated with a demand curve, which graphically shows the relationship between price and the number of units that consumers are willing to purchase at that price. In contrast, the term supply refers to the quantity that producers are willing to sell at a certain price, represented by a supply curve.

The equilibrium price, where the quantity supplied equals the quantity demanded, is a key concept in market dynamics. The price elasticity of demand is the percentage change in the quantity demanded of a good or service divided by the percentage change in its price, which indicates how sensitive the quantity demanded is to a change in price.