1.

The law of demand is a fundamental principle of economics that states that at

a higher price, consumers will demand a lower quantity of a good. The law of
demand states, “Assuming other things constant, price and quantity
demanded are inversely proportional”. As price increases, the quantity
demanded of the product decreases, the quantity purchased will increase.
The law of demand states that the quantity purchased varies inversely with
price. In other words, the higher the price, the lower the quantity demanded.
This occurs because of diminishing marginal utility. That is, consumers use
the first units of an economic good they purchase to serve their most urgent
needs first, then they use each additional unit of the good to serve
successively lower-valued ends. The law of demand focuses on those
unlimited wants. The law of demand tells us that if more people want to buy
something, given a limited supply, the price of that thing will be bid higher.
Likewise, the higher the price of a good, the lower the quantity that will be
purchased by consumers.
The law of supply states, “Other things assumed as constant, price and
quantity supplied are directly proportional”. It is a microeconomic law stating
that, all other factors being equal, as the price of a good or service rises, the
quantity that suppliers offer will rise in turn (and vice versa). As price
increases, the quantity supplied of product tends to increase, and as
price decreases, quantity supplied decreases.
2. The determinants of demand are the following;
 income;
 expectation on future prices;
 prices of related goods like substitutes and complements;
 size of the population
 quality of the product
 taste and preferences
 promotion and/or advertisement;
 religion;
 customs/traditions; and
 fad or fashion
The determinants of supply are the following;
 cost of production;
 availability of economic resources;
 number of firms in the market;
 technology applied;
 producer’s goals;
 taxes and subsidiaries;
 price of the product; and
 price expectation.