Aiu Online Economic Unit 2

American Intercontinental University Online
01/14/2012
Jingxi Liu

Abstract
When the price for a crossroad rise the supply and demand is usually affected. The way consumers lead answer to the change in price change is cognize as the price picnic of demand. The way that consumers will respond to the rise of a fruit will determine if the product is elastic, inelastic or unitary elastic.

Individual Project 2
With the changes misfortune in the economy, prices are rising for goods that consumers utilize on a daily basis. A lot to do with the rise of prices is base on the events that are happening in the countries where the United States gets its imports. some other reason could be from inflation, the U.S. having too much money in circulation. The rise in prices would affect the demand for that product. Because the demand depends on how much the item costs, the quantity that is supplied is also affected. Take the scenario from the duty assignment; the cost of paint per gallon increased form tether dollars to three dollars and fifty cents. This caused the demand for this item to go down from 35 gallons to twenty gallons. The manufacture will eventually begin to decrease the amount of paint being supplied. This is law of demand in a nutshell.



Sometimes when prices rise consumers may settle for the substitute. As I mentioned earlier, the quantity for the paint dropped from thirty-five to twenty as the price rose. This is known as the price elasticity of demand. It time the responsiveness of the quantity demanded as prices rise (Krugman & Wells, 2011). Since the price elasticity of demand, which is the percent change in quantity divided by the percent change in price, is more than one, we can prescribe that the paint is elastic. Consumers changed the quantity demanded by a large fate compared with the percentage change in price (Krugman & Wells, 2011). I came to this final result because the percent change in quantity demanded, which is the change in...If you requisite to get a full essay, order it on our website: Orderessay



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