Problem:
I recently bought skim milk instead of soy milk because the skim milk was less expensive. (It could be a purchase of anything, soda, fast food meals, etc.) I used milk because that is what I specifically bought and why.
1. Please help me explain how the law of demand affected my purchase.
2. Give specific examples of how the determinants of demand and supply affect this product (T-I-P-E-N and P-R-E-S-T).
3. What happens to the demand curve and the supply curve when any of these determinants change?
4. Give examples of scenarios that would cause a change in demand versus a movement along the same demand curve and supply curve for this product.
5. Discuss the new equilibrium price and quantity that result from these changes.