What The Heck is "Quantity" Supposed to Mean?!Watch
There are 8 possible scenarios involving changes in supply and demand that people are supposed to memorize in AS Economics:
The Four Times when Either Demand OR Supply Move on Their Own:
Rising Demand - Increase in Qty - Increase in Price
Falling Demand - Decrease in Qty - Decrease in Price
Rising Supply - Increase in Qty - Decrease in Price
Falling Supply - Decrease in Qty - Increase in Price
And The Four Times When Both Supply AND Demand Move Together:
Rising Demand - Falling Supply - ? Change in Qty - Big Increase in Price
Rising Supply - Falling Demand - ? Change in Qty - Big Decrease in Price
Rising Demand AND Supply - Big Increase in Qty - ? Change in Price
Falling Demand AND Supply - Big Decrease in Qty - ? Change in Price
While price is pretty self explanatory in every situation, I have yet to fully understand what "Quantity" represents. What does it mean in these examples? Does it mean "Equilibrium Quantity"? If so, can somebody please explain how the "Quantity Demanded" and "Quantity Supplied" are related to each other, and how the theory behind quantity as a whole relates to/ties in with each of the examples above?
Obviously trying to grasp the basics, would really appreciate some help.
The best way to understand the examples above is to draw a supply and demand graph with price on the y axis and quantity on the x axis and shift each line to see the effects. So using your first scenario where demand rises, the demand curve will shift up which increases the equilibrium price and quantity.