Laws of markets

According to the readings, there are two primary laws of markets: law of demand and law of supply (Butters & Asarta, 2019). Both laws attempt to illustrate how consumers and producers respond to changes in price of goods and services.
Law of demand states that consumers will demand more of a good when prices fall, all else constant (Butters & Asarta, 2019). A bottle of pinot noir might sell for $25 and consumer demand might equal 20,000 bottles for a specific market over a period such as one year. If only price decreases, more wine should be sold. For example, price might fall to $20 per bottle and demand increases to 25,000 bottles. Therefore, there is an inverse relationship between price and quantity for consumers. As prices fall, consumers demand more and as prices rise, consumers demand less. A demand curve is always downward sloping and falls from right to left on a graph.
Law of supply states that producers will supply more of a good when prices rise, all else constant (Butters & Asarta, 2019). If the price of a box of sugar cookies is $4, producers are willing to supply 40,000 boxes. If price increases to $5, producers might offer 50,000 boxes of cookies. Therefore, there is a direct relationship between price and quantity for producers. As prices rise, producers are willing to provide more goods and services. As prices fall, sellers are less willing to supply goods and services to market.
Notice there is an antagonistic relationship between producers and consumers over prices of goods and services. Consumers will want more product at a lower price, but producers are only willing to offer more product at higher prices. Price is the common signal between consumers and producers. When we look at market dynamics next week, we will see how price coordinates supply and demand of a market toward an equilibrium point.
Market demand is just the horizontal summation of all consumers in a market. Each person’s willingness to purchase and ability to buy will be different at each price from other consumers. However, individual demand will be more inelastic than the market. Elasticity of demand refers to how sensitive consumers are to changes in price. The more sensitive to changes in price the more elastic demand will be. We will cover elasticities during week three.
In addition, market supply is the horizontal summation of all the producers in a market. Like consumers, individual producer supply tends to be more inelastic than market supply. Market supply curve will be flatter and less steep than supply curves of individual producers.
An automatic beauty of markets is that supply and demand for a market will be more elastic or responsive to changes in price than any one individual consumer or producer.
If we look at consumer demand from a business perspective, how would a firm detect if customer demand is increasing or decreasing?
Butters, R. B., & Asarta, C. J. (2019). Principles of economics (2nd ed.). McGraw-Hill.

My MasterPapers
Calculate your paper price
Pages (550 words)
Approximate price: -

Why Us

Outstanding Academic Writing Service

At, you are assured of professional essay writing help from the leading experts online. Quality comes at the forefront of our custom writing service to ensure that all our customers are satisfied with the work delivered. We value repeat customers. For this reason, we ensure that each task is completed to perfection for high scores.

Top Writers

Our hiring process is highly intensive. The writers are exposed to a strict selection procedure before hiring to ensure that we acquire the most qualified, well-educated and experienced writers. Our team of writers, professors, editors and researchers will ensure that you get incredible results.

Plagiarism-Free Papers

We highly discourage plagiarism. For this reason, we have trained our writers in such a way that all the papers are written from scratch and are free from plagiarism. We also pay attention to ensure that each paper is completed as per the instructions provided. Referencing and citations are done as per the paper format selected by the customer. These include: APA, MLA, Chicago, Harvard, Turabian among others.

24/7 Customer Support

You can contact our support team via the chat window at the bottom right corner. Alternatively, feel free to email us via our support email: Our team is available 24/7 to respond to your queries and guide you though where need be.

Swift Delivery & 100% Money Back Guarantee

Simply choose the desired deadline when placing the order. The task is assigned to the most qualified writer as soon as the order is successfully placed. All the papers are delivered to you within the deadline selected. In case a paper cannot be delivered within the deadline selected, we request for a deadline extension within the shortest time possible.

Free Unlimited Revisions

Our customers can always request for a revision in case they feel that something needs to be added or changed after the final paper has been delivered. We do not charge for revisions. However, we highly discourage our customers from misusing this policy.

Try it now!

Calculate the price of your order

Total price:

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Services specializes in custom essay writing for all level of students. Simply relax as we get your paper done within the timeline indicated.


Academic Help Service

Our team of skilled writers and researchers is readily available to get any type of academic paper completed. We deliver high quality papers and projects to our customers to ensure that we maintain a long-term relationship that will shine your academic career.


Admission Essays & Professional Writing

An admission essay allows you to express yourself by providing personal details that wouldn’t have fit on other areas of an application. We have a team of experienced writers who will get you to the desired academic level through a professional and a personalized admission essay.


Editing & proofreading

Are you seeking for editing or proofreading help? We have a team of editors who will ensure that any issue within you paper has been addressed. Upload the paper to be cleaned up and relax as we get the job done.


Revision Support

At, you can always ask for revision in case you want some changes in you paper. We focus on ensuring that the grammar, research and formatting are done as per the latest academic writing standards.