Chardae Fortilus
Ch 3: Supply and Demand
What is the law of demand? What is the law of supply? What is the primary determinant of
each, and is the relationship direct or inverse.
Now, select a secondary determinant of supply or demand, that is, a supply or demand shifter.
Give a current example of how this determinant is affecting supply or demand, and which way
the curve will shift. Remember, right is an increase, and left is a decrease.
What is the law of demand? When the price of a product increases, the demand for the same
product will decreases. The primary determinant of demand is price. Price and quantity demand
of any good and service are inversely related to each other. A secondary determinant is the
consumers’ taste. A favorable change in taste causes the demand to increase, which causes the
curve to shift to the right. If the demand is unfavorable and its decreasing, the curve will shift to
the left. An example of this is, the introduction of electric cars which caused a decrease in cars
running on gas.