1. Supply & Demand

2. Market Economy In a market economy goods and services are made available through supply and demand Consumers decide what is supplied Consumers decide prices of products

3. The quantity of a good or service that consumers are ready to buy at a given price at a particular time. 1.A desire for the good 2.Buying power for the good 3.Exchange for the good

4. Law of Demand “The law of demand states that people will buy more at lower prices and buy less at higher prices, other things remaining the same".

5. As the price of a good or service increases, consumer demand for the good or service will decrease and vice versa

6. Generally, if there is a low supply and a high demand, the price will be high Think of Xbox at Xmas time or fruit during a drought Generally the greater the supply and the lower the demand, the lower the price will be. Think of after Christmas Sales.

7. What sellers are able to offer for sale at a specified price in a given time. Willing to produce more at higher prices

8. The higher the price or demand the greater the quantity supplied – more profits The lower the price or demand the lower the quantity supplied.

9. As the price of a good or service increases, the quantity of goods or services offered by suppliers increases and vice versa.

10. Law of Supply & Demand The supply will increase when demand is great( prices increase), and will fall when demand is low(pries decrease)

11. Market Place Buyers Market Best time for to buy for consumers Low prices Caused by Manufacturer over production or small demand Sellers Market Demand is greater than available Prices are high, producers get a profit Consumers buy regardless of price

12. Changes in prices will affect the amounts demanded and supplied. Non essential goods are elastic goods

13. Demand exists regardless of the prices because it is considered necessary

14. Whether the produce is essential for survival The availability of substitute goods How much income is discretionary

15. Objective B: Factors that effect Supply and Demand

16. Factors Affecting Demand Demand Determined by Utility (Usefulness) Consumers tastes and preferences Consumer buying power Number of consumers Consumer expectations Demand

17. Factors affecting demand Price of complementary goods Price of substitute goods Standard of Living Promotion Personal Selling Demand

18. Factors Affecting Supply Cost of Production Inventions and advanced technology Number of producers Prices of other goods Natural disasters Labor union demands Government regulations