Fichas
Supply and demand
Fichas del conjunto (9)
- 1What is supply? (3)- Quantities that suppliers are *willing and able to sell*
- At various prices at a
- Point of time - 2What is demand?- Quantities that consumers are *willing and able to buy*
- At any given price at
- a *point of time* - 3Factors of demand (3)- *Price* of product
- *Income* changes
- *Substitutes* - 4How do income changes affect demand? (3)- Increase income = More purchasing ability
- Demand for *normal goods* rises
Demand for *inferior goods* falls - 5How do substitutes affect demand? (Between competitor goods A and B) (3)- Price of good A falls
- Consumers switch away from goods with a higher price to a lower price
- Demand of good B falls - 6Price affecting demand? (2)- Price increase = *Purchasing ability* decreases
- Demand for the good decreases - 7What is the Law of Supply? (3) [2 variable equation]- Price of a good and
- Quantity supplied, share a
- *Positive relationship* - 8How does price affect supply? (2)- Lower price, firms receive *lower profit*
- At the same time higher prices mean *higher profit*
- ^ Price, ^ Supply
[- Firms want to sell more goods at higher prices] - 9Graph visuals for Demand and Supply graphs (Non-price factors VS Price factors)- Price factor = A shift along the curve (ROLLER COASTEEERRR)
- Non-price factor = Entire curve shifts left and right (earthquake bich)