1. Define the quantity demanded of a good or service.

Lesson 2
1. Define the quantity demanded of a good or service.

2. What does the demand curve tell us about the price that consumers are willing to pay?

3. What is the equilibrium price of a good or service?

SAMPLE SOLUTION

Economists use the term quantity demanded to refer to the aggregate amount of a service or good that customers demand over a specific time interval (Boyle, 2021). The quantity demanded depends on the good or service’s price in the market irrespective of whether the market experiences an equilibrium (Boyle, 2021). A curve that demonstrates the relationship between the price and quantity demanded is called the demand curve. Elasticity is the extent to which the quantity demanded shifts given a price change.
Economists use the demand curve to estimate competitive markets’ behavior. They combine demand and supply curves to approximate the equilibrium market price. In other words, the equilibrium market price refers to the rate at which consumers are…