SUPPLY AND DEMAND

DEMAND: The desire or willingness the buy a product.

DEMAND CAN BE CHANGED BY PRICE, TASTE, NEW CONSUMERS, AND EXPECTATIONS BY CONSUMERS.

POPULATION CHANGE AFFECTS DEMAND 1. NEW APARTMENTS 2. MORE PEOPLE POPULATION CHANGE AFFECTS DEMAND 3. HIGHER DEMAND

CHANGES IN INCOME AFFECT DEMAND

TASTE AFFECTS DEMAND

CHANGE IN EXPECTATIONS AFFECTS DEMAND THIS TO THIS TO THIS

LAW OF DEMAND: People will buy less if a product Is expensive and will buy more if it is cheaper. So, quantity And price move in opposite directions.

DEMAND CURVE

DEMAND SCHEDULE

MARKET DEMAND: The total demand of all consumers for their product or service.

ELASTIC DEMAND: The demand for a product changes…such as gasoline.

INELASTIC DEMAND: Some demands never change. People will buy the product regardless of the cost. Christmas trees are one example as well as beer.

UTILITY: The pleasure you get out of something you have bought.

SUBSTITUTE: Competing products are called substitutes because you can buy them in place of a more expensive brand.

COMPLEMENT: Products that are used together such as computers and software or DVD player and DVD’s.

SUPPLY: The quantities of a good or service that producers (companies) are willing to sell.

LAW OF SUPPLY: The idea that suppliers (companies) will offer more for sale at higher prices and less at lower prices. The higher the price, the greater the incentive to produce more for sale.

SUPPLY SCHEDULE HOW MANY YOU WILL SUPPLY AT WHAT PRICE.

MARKET SUPPLY: The combined supply of all the businesses that supply the same product or service.

SUPPLY CHANGES FOR FOUR REASONS The cost of resources changes The productivity of the workers changes New technology speeds up production Governmental policies or regulations change

PRODUCTIVITY: How much of a product or service a worker produces in an hour.

SUPPLY ELASTICITY: How the supply changes When price goes up or down.

SUPPLY SIDE ECONOMICS, ALSO CALLED TRICKLE DOWN… SAYS GOVERNMENT SHOULD CUT TAXES TO INCREASE PRODUCTIVITY

A SUPPLY AND DEMAND GRAPH

D = DOWN

EQUILIBRIUM PRICE IS WHERE SUPPLIERS THEIR GOODS AT A CERTAIN PRICE AND BUYERS WILL PAY THAT PRICE

A durable good/hard good is a good which does not quickly wear out and lasts a long time.

Nondurable goods or soft goods are the opposite of durable goods Nondurable goods or soft goods are the opposite of durable goods. They may be defined either as goods that are used up when used once, or that are used or wear out quickly.

Examples of nondurable goods include cosmetics, food, cleaning products, fuel, office supplies, packaging and containers, paper and paper products, personal products, rubber, plastics, textiles, clothing and footwear.