The reading assignment in your text this week (Ch 2) focuses on supply and demand, the most important economic model. Quantity demanded is the amount consumers are willing and able to buy at a particular price at a particular time. The Law of Demand states that there is an inverse relationship between price and quantity demanded. In other words, if prices go up, consumers will be able/willing to demand less (quantity) of the product. If prices go down, consumers will be able/willing to demand more (quantity) of a product. Notice that the demand curve slopes downward to show this relationship. There are several reasons why the Law of Demand seems to hold. One of these reasons is the substitution effect– when the price of your preferred product rises, you might buy another product that is just about as good and/or fulfills the same purpose. Diminishing marginal utility is another reason – as we consume more, the extra amount of happiness we get from consumption decreases, so we are willing to pay less for more and more of a good or service. If you are very hungry, you might be willing to pay an inflated price for a slice of pizza (try pricing food at airports or resorts!). But how much would you be willing to pay if you had just eaten 6 slices an hour ago? Probably less. As consumption increases, we are often willing to pay less for each additional unit. Your topic : Describe your favorite brand of product that you purchase frequently – be specific (for example, Diet Pepsi). What would happen if your preferred product experienced a large price increase? Would you still buy it? Would you buy less? What would you use as a substitute product (example, Coke, bottled water, tea, etc)? Requirements for full credit: Define (you can use your own words or the definitions from the book) and describe how the Law of Demand, thesubstitution effect and the Law of Diminishing Marginal Utilityapply to your favorite product. Use the appropriate terms and concepts in your essay. Your initial post should be at least 200 words and is due by 11:55 PM Wednesday. You should read all other student’s posts and respond to at least two posts. Responses should be at least 5 sentences and move the discussion forward. Saying “I agree” or “good post” does not count as a sentence – you must explain your position. You can also follow-up to other student’s responses and discuss the issues back and forth. Your follow-ups/responses are due by 11:55 PM Friday.