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Fun Video: Understanding - Supply and Demand Video Lecture | Economics Class 11 - Commerce

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FAQs on Fun Video: Understanding - Supply and Demand Video Lecture - Economics Class 11 - Commerce

1. What is supply and demand?
Ans. Supply and demand is an economic model that explains the relationship between the availability of a product or service (supply) and the desire or need for it (demand). It shows how the price and quantity of a good or service are determined in a market.
2. How does supply and demand affect prices?
Ans. Supply and demand directly influence prices. When the demand for a product or service increases, but the supply remains the same, the price typically goes up. Conversely, if the supply increases but the demand stays constant, the price usually decreases. The equilibrium between supply and demand determines the market price.
3. What factors can cause shifts in the supply curve?
Ans. Several factors can cause shifts in the supply curve. These include changes in production costs, technological advancements, government regulations, taxes, subsidies, and the number of suppliers in the market. Any change that affects the quantity of goods or services a producer is willing and able to supply at each price level can shift the supply curve.
4. How does demand elasticity affect consumer behavior?
Ans. Demand elasticity refers to how responsive the quantity demanded of a good or service is to a change in its price. If a product has elastic demand, a small change in price will result in a significant change in quantity demanded. In such cases, consumers are more sensitive to price changes and may adjust their consumption accordingly. On the other hand, products with inelastic demand show little change in quantity demanded even with price fluctuations, indicating less sensitivity to price changes.
5. Can supply and demand be affected by external events?
Ans. Yes, external events can impact supply and demand. Natural disasters, economic crises, changes in consumer preferences, and pandemics are examples of external events that can disrupt the supply and demand equilibrium. These events can lead to shifts in both supply and demand curves, causing changes in prices and quantities in the market.
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