1 DEMAND SUPPLY DEMAND SUPPLY 2 Demand It
- Slides: 5
1 DEMAND SUPPLY
DEMAND SUPPLY 2 Demand “It is the quantities of a product that suppliers are willing and able to sell at various prices period of time ceteris paribus” Tutorial Notes
DEMAND SUPPLY 3 Supply Producers’ Hamburger Supply Curve Change in quantity supplied owing to changes in price Price S 3 Price decreases 2 1 10 20 Qty supplied increases 30 Quantity
DEMAND SUPPLY Change in Quantity Demanded vs Change in Demand 4 Supply Q 1. What affects supply (non price reason)? - Changes in cost of factors of production (i. e. Price change in inputs needed to make goods) - Technological advances - Business Optimism - Global factor, eg. wars, famine, change in weather patterns etc. - Government policies , eg Taxation P P 1 S 2 Q 2 S 0 Q 1 Q
DEMAND SUPPLY 5 Demand Factors affecting demand Factors affecting supply • Change in weather pattern • Change in government legislation • Change in population size • Change in the price of a related product • Change in taste and preference • Change in consumer expectation • Change in income. - Changes in cost of factors of production (i. e. Price change in inputs needed to make goods -Technological advances - Business Optimism - Global factor, eg. wars, famine, change in weather patterns etc. - Government policies , eg Taxation Please note that factors affecting demand are DIFFERENT from factors that affect supply!
