ECON545 Week-1 Discussion 1

Quantity demanded changes when the price of the good changes. If the price of the good goes up, quantity demanded goes down. Quantity supplied is the amount offered to all at a certain price caused by any factor other than price.

A change in demand changes when one or more consumers preferences, income, and the price of a substitute good changes. A change in quantity supplied is when the amount offered to all as a result of a change in the price rises or falls.

It is so important to differentiate between these similar-sounding terms because:                            

If the price of bacon goes up drastically, then the amount of bacon would go down and the demand for sausage ( a substitute good) would rise. If the market price of bacon goes up from $3.50 to $4.50 then the quantity supplied goes up; as the cost of butchering cows rises, the change in the supply of bacon will go down... 
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