Demand & Supply Cheat Sheet

Demand Curve Supply Curve

The quantities of a good demanded at a range of prices in a particular time period. The quantity of output a firm produces at the various prices of the good
The Law of Demand The Law of Supply
An inverse relationship between a good’s price and the quantity demanded. A direct relationship between a good’s price and the quantity produced.
Quantity Demanded (Qd) Quantity Supplied (Qs)

A  in Price is a movement along the Supply

A Price is a movement along the Demand curve
curve
A Price effects Quantity Demand not Demand
A Price effects Quantity Supplied not Supply

Demand - Downward Sloping Supply – Upward sloping

INCOME EFFECT DMU SUBSTITUTION EFFECT PROFIT EFFECT COST EFFECT
P Income buy more Consumption  utility  P switch to cheaper good P , Profit  Supply , Costs 
Demand Curve Shift – TRIBE Supply Curve Shift – STORES
Tastes & Preferences Subsidies or # of Sellers
Demand Increase Demand Decrease Supply Increases Supply Decreases

More wanted - Demand  Less wanted - Demand Subsidies, S , Firms , S Subsidies, S, Firms, S
Related Goods Prices – Substitutes & Compliments Technology & Taxes
Demand Increase Demand Decrease Supply Increases Supply Decreases

Substitutes - P(A) D(B) Substitutes – P(A) D(B) Technology , S Technology , Supply 

Complements – P(A) D(B) Complements – P(A) D(B) Taxes, S  Taxes , S 
Income (Y) Other Related Good’s Prices
Demand Increase Demand Decrease Supply Increases Supply Decreases

Normal Good - Y D Normal Good - Y D Jointly Sup. Price, Supply Jointly Sup. Price, Supply 
Inferior Good – Y D Inferior Good - Y D Comp. Sup. Price, Supply Comp. Sup. Price, Supply 
Buyers (Population) Resource Costs
Demand Increase Demand Decrease Supply Increases Supply Decreases

Population , D Population , D Costs , Supply Costs, Supply 

Expectations of a future change in Income or Prices Expectations of Price of Good Sold
Demand Increase Demand Decrease Supply Increases Supply Decreases

Consumer Incomes , D  Consumer Incomes , D 

Expect Prices of Good , S Expect Prices of Good , S,
Future Prices of good , D Future Prices of good , D 
Market Equilibrium (Shifting and the Effects on Price & Quantity)
Demand P&Q  Demand P&Q  Supply P& Q  Supply P& Q   Of Supply & Demand

D& S then P uncertain & Q 

D& S then P & Q uncertain
D& S then P & Q uncertain
D& S then P uncertain & Q 