(a) State the laws of demand and supply. (b) With the aid of a diagram, explain the implications of a change in the quantity demanded of a commodity.

(a) Laws of demand and supply

1. Law of demand: Other things being equal, the quantity demanded of a commodity rises when its price falls and falls when its price rises.
2. Law of supply: Other things being equal, the quantity supplied of a commodity rises when its price rises and falls when its price falls.

(b) Change in quantity demanded

A change in quantity demanded is a movement along the same demand curve caused solely by a change in the commodity's own price. It is different from a change in demand, which shifts the whole demand curve.

In the diagram, the price of maize falls from $200 at point A to $150 at point B. Consequently, quantity demanded rises from 200 bags to 300 bags. This movement from A to B along the demand curve DD is called an extension or expansion in quantity demanded.

Conversely, if the price rises from $150 to $200, quantity demanded falls from 300 bags to 200 bags. The movement from B to A along the same demand curve is called a contraction in quantity demanded.