demand and the rise in price is an increase in quantity demanded from
to
2 We realize that apples are not a very exciting product to discuss, and many students wonder why
we do not instead use cellphones, restaurant meals, or cars as our hypothetical example. The
model of demand and supply, however, best applies to products that are demanded by many
consumers and supplied by many producers, each of which offers for sale a virtually identical
(“homogeneous”) version of the product. For this reason, we have chosen a simple agricultural
product, but we could have illustrated the same principles with beef, wheat, copper, newsprint, oil,
and a whole host of what economists call “commodities.”
Q 2.