Demand

23/9/2022
-Is the total amount of goods and services that consumers are willing and are able
to perchase at a given price in a given time period.

The Law of Demand

-States that as the price of peoduct falls,the quantity demamnded for the product
will usually increase ,ceteris paribus.
Demand curve
-Represents the relashionship between the price and the quantity demand of the
product, certeris paribus ((((Demand curve is downward sloping due to loss of
demand))))

Non price determinants

*Income
-Demand for normal goods rises,demand curve shifts to the right.
-Demand for inferior goods falls, demand curve shifts to the left (((when income
gets to a certain level,demand will become zero and so the demand curve
dissapears)))

Taste & Preference

-Changes in taste in flavour (i.e advertising campaign) demand cure shifts to the
right

Price of subtitles and compliments

-As price of subtitutes increases (Movment along curve) the demand shifts to the
rights
-As price of complements increase (Movment along the curve) the demand shifts to
the left

Demographic changes
-If population grows the demand for most of the products will increase thus the
demand curve shifts to the right ,more will br demand at each price level

Future price expectations

-If consumers think that the price of a product will increase in the future then
they may demand more of that product in the present, shifting the demand curve to
the right.
(If income increases demand will increase and shifts to the right)

Supply
-Is the total amount of goods and services that produces are willing and able to
sell at a given price in a given time period

The law of supply

-States the a products rises the quantity usually increases, certeris paribus

Supply curve
-Represents the relationship between the price and the quantity supplied of a
product ,certeris paribus

Non price determinants of supply

-Changes in cost factors of production increase the cost of production and supply
shifts to the left
-Land
-Labour
-Capital
-Entrepreneurship
Number of firms in the market
-More firms producing ->supply shifts to the right->more are being supplied at each
price level

Natural disasters and weather

-If good weather conditions they supply increases (Especially in agriculture
markets) and if bad weather conditions then supply decreases ,shifts to the left.

Price of relating product

-Joint/competitive if producer could produce another product with higher profit,due
to limited resources, the supply for the existing product decreases. Joint supply
means that when a good is produced another good is produced at the same time like
petrol and diesel for example so if demand for one good us joint supply increases
then the supply of the other goods will also increase.

Market equilibrium
-Is where the supply equals to the demand