Supply and Demand

Cause of Change in Supply

• change in technology
• change in weather
• change in cost of production
• change in number of sellers
• change in taxes or subsidies
• change in expectations

 

Cause of Change in Demand

• change in buyer’s taste (advertisement)
• change in number of buyers (population)
• change in income (normal goods/inferior goods)
• change in price of related goods (complementary/supplementary)

Supply:is the quantities that producers or sellers are willing and able to produce at various places.
Law of Supply:There is a direct relationship between product and quantity supplied.
Demand is the quantities that people are willing and able to buy at various prices.   Law of Demand There is an inverse relationship between price and quality demanded   Normal Goods-increases income; causes an increase in demand   Inferior Goods-Increase in income; causes a fall in demand   Complementary Goods-ex: fish and chips   Supplementary Goods-ex: white bread replaced by wheat bread  Supply and Demand: Gallon of Milk (VIDEO LINK)