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Supply and Demand

Mar. 23, 2009 • 734 likes • 167,926 views

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Economy & Finance Self Improvement Business

Covers the basics of the law of supply and demand, as well as some of the factors of production and demand.

Lina Nandy Follow

Associate Director

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 Supply and Demand

1. • Quantities of a particular good or service consumers are willing and able to buy at di erent possible prices.
2. • Consumers buy more of a good when its price decreases and less when its price increases. When price Demand When price Demand goes up… goes down… goes down… goes up…
3. 1. Changes in income (the income e ect)… when income consumers goes up buy more when income consumers goes down buy less
4. 2. Prices or availability of substitutes (substitution e ect)… a substitute is a good that can be used • in place of another. or
5. 3. Prices or availability of complementary goods... complementary goods are things that • are o en are sold or used together &
6. 4. Changes in the number of buyers... more people (buyers), more sales
7. 5. Changes in tastes & preferences… then… now…
8. • Supply: The amount of a product that is o ered for sale at all possible prices in the market.
9. • Tendency of suppliers to o er more of a good at a higher price and less at lower prices. When price Supply When price Supply goes up… goes up… goes down… goes down…
10. • The law of demand describes how price a ects CONSUMERS… • And the law of supply describes how price a ects PRODUCERS
11. 1. Cost of inputs (factors of production)… when production supply costs go up goes down when production supply costs go down goes up
12. 2. Changes in productivity… when productivity supply goes up goes up when productivity supply goes down goes down
13. 3. Change in the number of sellers in the market… More sellers in a market = increase • supply. Fewer sellers in a market = decrease • supply.
14. • The equilibrium price is where supply & demand intersect. equilibrium price

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