Demand and Supply Overview

DEMAND 

• It is the quantities that people are willing and able to buy at various prices.

LAW OF DEMAND

• inverse relationship between prices and quantity demanded.

WHAT CAUSES CHANGE IN QUANTITY DEMANDED?

• Change in price.

WHAT CAUSES A CHANGE IN DEMANDED?

1. Change  in number of buyers (population) 
2.  Change in buyer's taste (preference and advertisement)
3.  Change in income (normal goods and inferior goods)  
4.  Change in price of related goods (substitute and complementary)
5.  Change an expectation (future) 

SUPPLY 

• It is quantities that producers or sellers are willing and able to produce and sell at various prices.

LAW OF SUPPLY  

• It is the direct relationship between price and quantity supplied 

WHAT CAUSES A CHANGE IN SUPPLY? 

•  Change in price 

WHAT CAUSES A CHANGE IN SUPPLY?

1.  Change in the number of sellers 
2.  Change in cost of production 
3.  Change in technology 
4.  Change in taxes or subsides (money that government provides)
5.  Change in the weather 
6.  Change an expectations