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I recently purchased skim milk instead of soy milk because 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. Describe 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.
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Explain all your answers below clearly, including brief definitions of each term.
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