Supply and demand

Demand, Supply and Markets Demand is the amount of goods/services that people are willing to buy. Supply is the amount of goods/services that producers are willing and able to market at any given price, at any given time. A medium in which buyers and sellers interact and agree to trade at a certain price, is called a market.

So what effects demand? The demand can be affected by the increase and decrease of price A products Competition can determine if demand increases or decreases If the general income level increases that means that more people will be able to buy more stuff which may decrease quantity

Some more points… Trends play a very large part in consumers demand for products Customers expectations of a product impact the demand for a specific product. The size of the market may also determine the level of demand for a particular product

Demand schedule is a table indicating the demanded quantities at different price levels. The curve and the schedule Demand curve is a graphical representation identifying the relationship between quantity demanded and price for a product in a market

Extension and contraction The up and left movement on a demand curve when price rises is called the Contraction of demand. The down and right movement on a demand curve when prices fall is called the Extension of demand.

A supply curve is a graphical representation of the relationship between quantity supplied and a products price in its market. Market supply is a sum of individual supplies of a particular good or service. In the long run, time periods are not precise and change between industries, and there are more changes that are possible.

Some other factors… The factors that can affect supply: Changes in the cost of production The introduction of new technology Taxes External shocks

The equilibrium price is when the price at which quantity supplied and quantity demanded are equal in a market (this means that there is no excess supply or demand). What happens if the price of a product changes? Well if the price goes down, the demand will increase, and if the price increases, the demand will decrease.

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