Factors that Shift Supply and Demand

Economics Club
Mind Map by Economics Club, updated more than 1 year ago
Economics Club
Created by Economics Club about 4 years ago
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Supply and Demand Shifters
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Resource summary

Factors that Shift Supply and Demand
1 Demand
1.1 Number of Buyers

Annotations:

  •  increase or decrease in people wanting to but things in the market.
1.2 Tastes and Preferences

Annotations:

  • what is in fashion at the time, fads, or stores stop selling things because of the change in season
1.3 Income

Annotations:

  • A rise or fall in income that causes consumers to buy either normal goods or inferior goods. Normal goods are any name brand good and inferior goods are any off-brand goods.
1.4 Expectations of Buyers

Annotations:

  • what consumers think will happen to goods because of outside services
1.5 Price of Related Goods

Annotations:

  • Prices of substitutes and compliments cause changes in demand.  A substitute is a similar good to the product that is being produced.  It competes for more consumers with the product.  A compliment is something you buy along with the product.  They come hand-in-hand normally, like peanut butter and jelly.
2 Supply
2.1 Number of Sellers

Annotations:

  • the amount of businesses that provide a product to the market
2.2 Prices of Inputs

Annotations:

  • includes everything from labor to resources to cost of shipping
2.3 Technology

Annotations:

  • new inventions make production easier
2.4 Taxes and Subsidies

Annotations:

  • Taxes make supply decrease and subsidies make supply increase.  Taxes decrease supply because it costs the company more to produce the product.  Subsidies increase supply because the government gives money to the company in order to make cost of production less.
2.5 Price of Interchangeable Goods

Annotations:

  • sometimes it is cheaper to produce another product than it is to produce the one that you currently are producing
2.6 Expectations of Producers

Annotations:

  • what sellers think will happen in the market
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