Question

the supply curve shallow or steep? What does this mean about the elasticity of supply for memberships? (5 points)

Answer 1

Answer:

In Microeconomics,supply curve is a graphical curve which illustrates the relationship between price of any product or service and its quantity supplied in the market.

Explanation:

• Price elasticity of supply of any product or service basically examines the responsiveness or reaction of the quantity supplied of any product or service in response to any change in its market price.

• A steep or shallow supply curve ideally indicates that the supply of any product or service is relatively price inelastic.
• Inelastic price elasticity of supply of any product or service implies that the sellers or producers of the particular product or service in the market is relatively unresponsive or non-reactive or slow reactive to any change in the price of the concerned product or service.
• In other words,the percentage of proportion of change in the quantity supplied of any product or service in this case is less than the percentage or proportionate change in the price of that particular product or service.

Answer 2

The aggregate supply and demand model is a model that shows what determines the total supply or the total demand of the economy and how the total demand and supply interact at the macroeconomic level.

Aggregate supply is the total amount of production that companies will produce and sell — in other words, real GDP.

Aggregate demand is the total amount spent on household goods and services in an economy.

Let's start by looking at the point where aggregate supply equals aggregate demand — equilibrium. We can find this point in the diagram below; this is where the aggregate supply, AS, and aggregate demand, AD curves intersect, showing the equilibrium level of real GDP and the equilibrium price level in the economy.

At a relatively low price level for production, companies have little incentive to produce, although consumers are willing to purchase a high quantity. As the price level of products increases, aggregate supply increases and aggregate demand falls until the break-even point is reached