Identify curves A and B in the graph above. Give the economic term for point C. Identify the situation at the market illustrated by D and E. Explain the relationship between the price and curves A and B indicated in the graph.

Curve A slopes downwards, indicating an inverse relationship between price and quantity. This is the demand curve.

Curve B slopes upwards, indicating a direct relationship between price and quantity. This is the supply curve.

• A: Demand curve
• B: Supply curve

2.2.2

Point C is the intersection of the demand and supply curves, where quantity demanded equals quantity supplied.

• Equilibrium point (or Market equilibrium)

2.2.3

At price P, the quantity supplied (on curve B) is greater than the quantity demanded (on curve A), leading to an excess of goods. This is a surplus.

At quantity Q, the quantity demanded (on curve A) is greater than the quantity supplied (on curve B), leading to a lack of goods. This is a shortage.

• D: Surplus
• E: Shortage

2.2.4

• Curve A (demand) shows an inverse relationship between price and quantity demanded. As price increases, the quantity demanded decreases, and vice versa.

• Curve B (supply) shows a direct relationship between price and quantity supplied. As price increases, the quantity supplied increases, and vice versa.

2.3.1

• Ensuring quality and safety standards for agricultural products to protect consumers.
• Regulating prices to prevent exploitation of producers or consumers and ensure fair trade.

2.3.2

• Perishability of many agricultural products, requiring quick sale and specialized storage.
• Poor infrastructure (e.g., roads, storage facilities, transportation) which hinders efficient movement of goods to markets.