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  • Factors Affecting Supply

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    Jenilyn Bernardo
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    This document discusses the factors that affect supply and demand equilibrium. It explains that supply is determined by the price of inputs, substitute goods, the number of suppliers, and technology. Demand depends on how many people are willing and able to purchase a good at a given price. The supply curve slopes upward as it is a direct relationship between price and quantity supplied, while the demand curve slopes downward as price and quantity demanded have an indirect relationship. Equilibrium occurs at the price where supply and demand are equal. Disequilibrium happens when supply does not meet demand, resulting in either a surplus or shortage. Shifts in supply or demand curves change the equilibrium price.

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    This document discusses the factors that affect supply and demand equilibrium. It explains that supply is determined by the price of inputs, substitute goods, the number of suppliers, and technology. Demand depends on how many people are willing and able to purchase a good at a given price. The supply curve slopes upward as it is a direct relationship between price and quantity supplied, while the demand curve slopes downward as price and quantity demanded have an indirect relationship. Equilibrium occurs at the price where supply and demand are equal. Disequilibrium happens when supply does not meet demand, resulting in either a surplus or shortage. Shifts in supply or demand curves change the equilibrium price.

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    4 views10 pages

    Factors Affecting Supply

    Uploaded by

    Jenilyn Bernardo
    This document discusses the factors that affect supply and demand equilibrium. It explains that supply is determined by the price of inputs, substitute goods, the number of suppliers, and technology. Demand depends on how many people are willing and able to purchase a good at a given price. The supply curve slopes upward as it is a direct relationship between price and quantity supplied, while the demand curve slopes downward as price and quantity demanded have an indirect relationship. Equilibrium occurs at the price where supply and demand are equal. Disequilibrium happens when supply does not meet demand, resulting in either a surplus or shortage. Shifts in supply or demand curves change the equilibrium price.

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    of 10

    FACTORS

    AFFECTING SUPPLY
    SUPPLY

    • Supply is the quantity of a product that a


    seller is willing to sell at a given price.
    Price of inputs
    FACTORS
    AFFECTING
    Price of substitute
    SUPPLY
    Number of suppliers

    Technology

    Expected prices in the


    future
    DEMAND

    • Demand is the amount of a good, services, or


    resource that are people willing and able to
    buy during a specified period at a specified
    price.
    SUPPLY AND
    DEMAND IN
    EQUILIBRIUM

    The demand curve is downward The supply curve is vertical line


    sloping. means supply curve slope upward.
    EQUILIBRIUM PRICE

    The equilibrium price is where supply and demand The price at which supply and demand are equal is the
    intersect. equilibrium price, also called as market clearing price.
    DISQUILIBRIUM AND SHIFTS

    This when supply and demand are not equal.

    This imbalance of the two creates


    disquilibrium, surplus and shortage.
    SURPLUS AND SHORTAGE

    SUPPLY > DEMAND = SURPLUS

    SUPPLY < DEMAND = SHORTAGE


    THE SHIFT THAT CHANGE PRICE

    NOTES: INCREASE - RIGHT DECREASE - LEFT


    THANK YOU

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