--%>
Assignment Help - homework help

Demand often exceeds supply and supply exceeds demand

“In the corn market, demand often exceeds supply and supply sometimes exceeds demand.” “The price of corn rises and falls in response to changes in supply and demand.” Among these 2 statements used correctly which in the terms “supply” and “demand”?  Explain.

E

Expert

Verified

In the first statement “supply” and “demand” are used incorrectly. Supply and demand are both schedules and curves that intersect where quantity supplied and quantity demanded are equal.  One cannot talk of curves that intersect as exceeding or not exceeding each other.

Supply and/or demand can change (the entire curves can shift). Each time this happens, it will create a new intersection of the two curves that will lead to changes in the equilibrium quantity and price of corn.  Thus, the terms “supply” and “demand” are used correctly in the second statement.

   Related Questions in Business Economics

  • Q : Comparison between EVA and Ratio

    Comparison between EVA and Ratio Analysis: EVA helps in measuring the economic performance of the company. It is the profit earned by the firm less the cost of financing the firm’s capital. It shows that the shareholders gain when the return fro

    		•
  • Q : Why does a demand curve slope downward

    Why does a demand curve slope downward?

    		•
  • Q : Problem regarding to intermediaries and

    Society gains from the activities of intermediaries which succeed within: (1) falling uncertainty and transaction costs for last consumers. (2) arbitrating strikes and defending workers’ rights. (3) creating productive jobs for unskilled workers

    		•
  • Q : Reciprocal Trade Agreements Act had

    How Reciprocal Trade Agreements Act had goal of reducing tariffs?

    		•
  • Q : Exchange and Specialization I have a

    I have a problem in economics on Exchange and Specialization. Please help me in getting the right answer from the following question. Sarah the wheat farmer would be most probable to trade for fruit from the Kathy's orchard if: (i) Sarah's opportunity

    		•
  • Q : International trade to the U.S. economy

    How important is international trade to the U.S. economy?  In terms of volume, does the United States trade more with industrially advanced economies or with developing economies? What country is the United States’ most important trading partner, quantitati

    		•
  • Q : Define Average cost and Marginal cost

    Briefly explain the term Average cost and Marginal cost?

    		•
  • Q : Illustrate a fundamental characteristic

    Illustrate a fundamental characteristic of demand behavior?

    		•
  • Q : When productive resources are utilized

    While productive resources are utilized efficiently: (w) prices greatly exceed production costs for current outputs. (x) opportunity costs are at their minimums for all goods. (y) domestic production exceeds the value of foreign output. (z) the value

    		•
  • Q : What are the criteria of issuing stocks

    What are the criteria of issuing stocks or bonds?

    		•