Demand
Demand- quantities that people are willing and able to buy at varies prices.
The Law of Demand- states that there is an inverse relationship between price and quantity demanded.
What causes a "Change in quantity demanded?"- change in price (change in QD)
What causes a "change in demand"?
1. Change in buyer's taste (advertisement)
2. Change in the number of buyer's (population)]
3. Change income (Normal/ Inferior goods)
eating good/eat good to bad
4.Change in the price of related goods (Complementary goods/ Substitute goods)
french fry with burger / instead of ketchup use mustard
5. Change in expectations (looking out for the future)
Supply
Supply- the quantities that producers or sellers are willing or able to produce at varies prices
The Law of Supply- direct relationship between price and quantity supply (Price goes up, quantities go up or price goes down, quantities go down)
What causes a "change in quantity supplied"? (change in QS) - change in quantity demand
What causes a "change in supply"? (change in S)
1. Change in weather
2. Change in the number of sellers/ suppliers
3. Change in technology
4. Change in the cost of production
5. Change in taxes or subsides (money that the government supplies)
6. Change in expectations
I really like how these notes show the relationship between demand and supply. The different variables such new Technology being for supply and new advertising for demand. This really helped me get an idea of what really affects each of the variables.
ReplyDelete