Answer to Question #14612 in Microeconomics for Shakil

Question

Theory of Demand
a. What is demand? How it is different from want and need? Mention the determinants of demand.
b. Law of demand. Formulate a hypothetical demand schedule. Draw a demand curve based on the demand schedule.
c. Distinguish between Demand and Quantity demanded. Explain movement along vs. shift of the demand curve. Show graphically the effect of the following changes on the position of the demand curve for Pepsi: i) Decrease in the price of Coca-Cola, ii) Increase in the consumer’s income, iii) Increase in the advertisement cost.
d. What is demand function? Write the demand equation.
e. What is market demand? How the market demand curve is derived?
Define consumer surplus? “The more the competition among the sellers, the more the consumer surplus gained by the consumers” – do you agree with the statement. Justify your answer. Suppose, a consumer is willing to pay Tk.28/Kg for 10Kg potato and Tk.24/Kg for 15Kg potato. If the market price of potato is Tk.25/Kg, what will be the total consumer surplus of the consumer if he/she buys 10Kg potato?

Answer 1

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