Demand & Supply & Markets

  • Created by: Izzie
  • Created on: 28-02-18 14:55
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  • Demand & Supply & Markets
    • Demand
      • As price rises quantity demanded falls & as price falls quantity demanded rises
      • Change in price causes a movement along the demand curve
      • If consumers want less of the product it shifts to the left, if they want more it shifts right
      • Reasons for a shift
        • Change in substitute prices
        • Change in consumer incomes
        • Fashions, tastes, preferences
        • Advertising and branding
        • Demographic
        • External shocks
        • Seasonlity
    • Supply
      • As price rises quantity supplied rises & as price falls quantity supplied falls
      • Reasons for a shift
        • Change in the cost of production
        • Introduction of new tech
        • Indirect taxes
          • Increased tax can lead to increased prices
        • Govt. subsidies
        • External shocks
    • Markets
      • Equilibrium point- when the curves cross, the point where quantity demanded = quantity supplied
      • A fall in supply shifts the curve to the left as less is produced at every price. Equilibrium price rises & quantity sold decreases. This could be caused by higher input prices leading to increased production costs


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