Demand Supply

Sanskriti Jain
Mind Map by Sanskriti Jain, updated more than 1 year ago
Sanskriti Jain
Created by Sanskriti Jain over 6 years ago
5
0

Description

Demand Supply curves, Elasticity

Resource summary

Demand Supply
  1. Demand Curve
    1. Downward Sloping
      1. Substitution Effect - Consume something else
        1. Income Effect - Real Income falls
          1. Elasticity
            1. Determinants of Elasticity - Definition of the Market • Availability of close Substitutes • Proportion of expenditure • Necessities versus Luxuries • Addictiveness • Time Horizon
              1. Mid Point method - so that elasticity remains the same irrespective of direction of movement along supply surve
                1. Perfecty Inelastic E = 0
                  1. Highly Inelastic E< 1
                    1. Highly Elastic E>1
                  2. Income Elasticity of Demand = ( % change in Quant) / (% change in Price)
                    1. Cross Elasticity = ( % change in demand of quat A) / (% change in demand of quant B)
                      1. Substitutes - E > 0
                        1. Compliments - E < 0
                  3. Shifts Caused By- Income, Substitutes available, Preference, Expectations, Number of Buyers
                    1. Income Rises - D for Normal good rises
                      1. I Rises - D for Inferior good goes down
                      2. Related Goods
                        1. Substitutes
                          1. Compliments
                      3. Supply Curve
                        1. Upward Sloping
                          1. Shifts Caused by - Input Prices, Technology, Expectations, Number of sellers, Govt policy
                            1. Supply Elasticity = (% Change in Quantity)/ (% Change in Price)
                              1. Supply is more elastic in the long run
                                1. Highly inelastic - Elasticity < 1
                                  1. Unit Elastic - Slope = 1
                                    1. Highy Elastic - Elasticity > 1
                              Show full summary Hide full summary

                              Similar

                              Using GoConqr to study Economics
                              Sarah Egan
                              Economics
                              Emily Fenton
                              Economics - unit 1
                              Amardeep Kumar
                              AN ECONOMIC OVERVIEW OF IRELAND AND THE WORLD 2015/16
                              John O'Driscoll
                              Using GoConqr to teach Economics
                              Sarah Egan
                              Functions of Money
                              hannahcollins030
                              Comparative advantage
                              jamesofili
                              GCSE - Introduction to Economics
                              James Dodd
                              Market & Technology Dynamics
                              Tris Stindt
                              PMP Formulas
                              Krunk!
                              Economic Growth
                              Maya Khangura