CHAPTER 5: DEMAND & SUPPLY STUDY GUIDE

1.
2.

Below is a list of terms pertaining to Chapter 5: DEMAND AND SUPPLY

In your notebook give the definition for each term:
Demand, demand curve, law of demand, substitute goods, change in demand, complementary
good, supply, supply curve, law of supply, revenue, change in supply, elasticity of demand,
inelastic, elastic, elasticity of supply.
PART II DIRECTIONS:
Review the concepts and terms below:
THE LAW OF DEMAND

AS
P R IC E S
IN C R E A S
E
DEM AND
FA L L S

CHAPTER 5: DEMAND & SUPPLY STUDY GUIDE

AS
PRICES
FALL

QUANTITY
DEMANDE
D RISES

FACTORS THAT CHANGE DEMAND

INCOME

REASONS WHY DEMAND CHANGES

PEOPLE HAVE MORE OR LESS TO

MARKET SIZE

SPEND
NUMBER OF POTENTIAL BUYERS

CONSUMER TASTES
CONSUMER EXPECTATIONS

CHANGE
POPULARITY INCREASES DEMAND
POSSIBLE FUTURE PRICES AFFECT

SUBSTITUTES

PRESENT BUYING
SOME PRODUCTS ARE

COMPLEMENTS

INTERCHANGEABLE
SOME PRODUCTS ARE USED
TOGETHER

CHAPTER 5: DEMAND & SUPPLY STUDY GUIDE

THE LAW OF SUPPLY

AS PRICES FALL

QUANTITY SUPPLIED FALLS.

THE LAW OF SUPPLY

AS PRICES RISE

QUANTITY SUPPLIED RISES.

CHAPTER 5: DEMAND & SUPPLY STUDY GUIDE

FACTORS THAT CHANGES SUPPLY
INPUT COSTS
LABOR PRODUCTIVITY

REASONS WHY SUPPLY CHANGES

SUPPLIERS COST INCREASE
INCREASED PRODUCTIVITY

TECHNOLOGY

DECREASES COSTS
BETTER TECHNOLOGY IMPROVES

GOVERNMENT ACTIONS

PRODUCTION
GOVERNMENT ACTION CAN HELP OR

PRODUCER EXPECTATIONS
NUMBER OF PRODUCERS

HINDER PRODUCTION
FUTURE PRICES AFFECT PRODUCTION
MORE PRODUCERS = MORE
PRODUCT