Demand and Supply

The law of demand states that, other things being equal:

1. As price rises, quantity demanded falls
2. Demand always equals supply
3. Price has no effect on demand
4. As price rises, quantity demanded rises

A normal demand curve slopes:

1. Vertically
2. Upward from left to right
3. Horizontally
4. Downward from left to right

The law of supply states that, other things being equal:

1. Supply never changes
2. As price rises, quantity supplied rises
3. Supply depends only on demand
4. As price rises, quantity supplied falls

Market equilibrium occurs where:

1. Quantity demanded equals quantity supplied
2. Demand is zero
3. Supply is zero
4. Price is highest

At a price below equilibrium, there will be:

1. No change
2. Excess demand (a shortage), which pushes the price up
3. A fall in price
4. Excess supply

At a price above equilibrium, there will be:

1. A shortage
2. No effect
3. Excess supply (a surplus), which pushes the price down
4. Rising prices

A shift of the whole demand curve is caused by:

1. Nothing at all
2. A change in a non-price factor, such as income or tastes
3. A change in supply only
4. A change in the good's own price