Demand and Supply is that branch of economics that deals with the behavior of the country’s economy. As an economics student, one needs to complete multiple assignments at a time. So, if you have the topic “Effect of an upward shift of demand and supply to equilibrium price” and looking for economics assignment help, then you are at the right place.
Read this blog to learn about this topic in detail.
Let’s learn the demand and supply basics first…..
Before moving forward, let me (an economics expert) recall your basics with the basic terms.
Demand
What do you think about demand? Is it a need of a person? Or a want he has? Well, it is both the need and want. Do everything a person need is his demand?
No!!!
Anything that a person desire to buy at a particular topic at the time of need is a demand. According to economics assignment help experts in Australia, demand is something a person is ready to buy at a particular price to meet inner satisfaction. Thus, in a market, demand plays an important role. Also, there is an inverse relationship. When a consumer sees an increase in the price of a commodity, he shifts to another one. It means with rising prices, the demand for a particular good decrease, and vice versa.
Supply
So, now let’s understand the supply. Supply means the units of goods the producer will make available to the consumers with their available resources at a particular time. Also, a market movement determines the supply of a particular good.
On the other hand, if the price of a commodity increase, it means the supply of that good in the market also increases. There is a positive relationship. See, the business aims to increase its revenue every time. So, if they know the price of a particular good is increasing, they will produce more to generate more profit. If you want to know about the law of supply, you may take economics assignment help for expert assistance.
Equilibrium Price
Market clearing or equilibrium price is the intersection price where the demand and supply meet. So, in simple words, there is an equilibrium when the demand for goods and services is equal to its supply.
Do you know what is unique about the equilibrium price of a commodity?
Economics assignment help experts say it is unique because demand and supply only meet at the same time when their price is the same.
Note: Both demand and supply curves express the relationship between commodity price and the quantity demanded. Also, the equilibrium price is when the demand and supply meet at a common point and is only because of a price change. On the other hand, a single business or a consumer cannot change and affect their equilibrium price.
What Is the Effect of Demand and Supply on the Equilibrium Price?
Demand and supply of goods affect the equilibrium price a lot. So, let’s see what economics assignment help experts in Australia define about it.
Alternation in Demand
The change in demand will affect the equilibrium price in the same direction in which it changes. For example, if a commodity demand decreases, its equilibrium price will also decrease. On the other hand, if its demand increases, its equilibrium price also increases.
Decrease in demand
- There will be an excess supply of goods if the demand for a product decreases.
- If there is more supply of goods in the market, the supplier decreases the price of that commodity. On the other hand, when the price decreases, producers will not produce more, and thus, the output will decrease.
Increase in demand
- When there is an increase in demand, the producer tends to develop more goods at the same price.
- Excess demand means an increase in price and its results in an increase in production. Thus, the output increases.
You can take the assignment help in Australia if you want to know the shift in the demand curve.
Alternation in Supply
The change in supply will affect the equilibrium price in the opposite direction in which it changes.
Increase in the Supply
- It will cause a decrease in the equilibrium price.
- The price of a commodity will fall, and demand will increase in the case of excess supply.
Decrease in the Supply
- It will cause an excess demand for a commodity.
- Thus, the price of commodities increases.
When there is alternation in both
According to economics assignments help experts, changes in both demand and supply affect the equilibrium price a lot.
- When both change in the same direction, the price will be determined.
- When both change in the opposite direction, the output will be determined only. Explore more articles.
