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Combine items in column Ⅰ with those in column Ⅱ to make complete sentences according to what you hear.
Supply and demand, in classical economics, are factors that are said to determine price.Supply does not mean the existing stock of a commodity or service. It refers to the amounts of a commodity that producers will supply at different prices; in general, a higher price yields a greater supply. Demand does not simply measure the strength of people's desires. The desire to possess a commodity will have no effect on the price of that commodity. Demand refers to the quantity of a commodity that is demanded by consumers at any given price. According to the law of demand, demand decreases as the price rises.
The amounts offered for sale will depend upon the prices consumers are prepared to pay. The higher the price that prevails in the market, the greater the quantity of a commodity that will be supplied. In the short run many things are in fixed supply. The amount of a commodity that will be supplied at a price depends on its cost of production, or more precisely, its marginal cost. If the market price is high, firms with higher cost will come into production. The higher price will also encourage low-cost firms to expand their output. A fall in the demand for a product leads to a fall in market price so that production becomes less profitable. The quantity supplied will fall as firm cuts back on production. The fall in price may also drive some of the less efficient firms out of business.
B Competition
Mark the following box before each statement with "T" for true or "F" for false.
Competition, in economics, is rivalry in supplying or acquiring an economic service or commodity.
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