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SUPPLY

Learn about the relationship between price and quantity in economics, definitions of quantity demanded and demand, determinants of demand, and the basics of supply. Get insights into the essential variables shaping economic markets.

emery-marsh
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SUPPLY

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  1. SUPPLY DEMAND

  2. Plot the following: Price Quantity Demanded Qd P $9 2 8 3 5 7 6 9

  3. Price Quantity Demanded Qd P $9 2 8 3 5 7 6 9 P Qd 9 just a point on the curve. To be on the demand curve a person must be WILLING and ABLE to purchase the product or service. 8 7 6 D is the entire curve. 2 3 9 5 Q

  4. Price Quantity Demanded Qd P $9 2 8 3 5 7 6 9 P Qd 9 just a point on the curve. There is an ___________ relationship between price and quantity. 8 inverse 7 6 D is the entire curve. 2 3 9 5 Q

  5. 9 8 7 6 D 2 3 9 5 Q Definitions: Quantity demanded--it is the amount that will be purchased at a specific P. Demand--it is a schedule of quantities of goods and services that will be purchased at various prices at a specified time, all other things held constant.

  6. 9 8 7 6 D 2 3 9 5 Q

  7. Qd 9 just a point on the curve. 8 7 6 D is the entire curve. 2 3 9 5 Q Price changes Quantity Demanded Price DOES NOT CHANGE DEMAND!!!!!!!!

  8. Only one variable Qd PRICE PRICE DOES NOT DEMAND!!

  9. GUESS HOW MANY DETERMINANTS OF DEMAND THERE ARE? 8 And if you don’t memorize these variables, YOU WILL FAIL THIS CLASS!! ARE THERE ANY QUESTIONS?

  10. Eight Determinants of Demand: 1. # of consumers

  11. 6 $36.95

  12. Eight Determinants of Demand: 1. # of consumers 2. Income--Normal Goods As people’s incomes go up demand for normal goods increases. As people’s income go down, demand for normal goods decrease. 3. Income--Inferior Goods As people’s incomes go up demand for inferior goods decreases. As people’s income go down, demand for inferior goods increases.

  13. ______Used Furniture Store ______Lazy Boy Store

  14. $25

  15. Eight Determinants of Demand: 1. # of consumers 2. Income--Normal Goods 3. Income--Inferior Goods 4. Preferences

  16. Eight Determinants of Demand: 1. # of consumers 2. Income--Normal Goods 3. Income--Inferior Goods 4. Preferences 5. Price of related products: Substitutes

  17. Eight Determinants of Demand: 1. # of consumers 2. Income--Normal Goods 3. Income--Inferior Goods 4. Preferences 5. Price of related products: Substitutes 6. Price of related products: Complements

  18. Eight variables that shift Demand: 1. # of consumers 2. Income--Normal Goods 3. Income--Inferior Goods 4. Preferences 5. Price of related products: Substitutes 6. Price of related products: Complements 7. Expected future P’s by consumers 8. Expected future Y by consumers

  19. SUPPLY

  20. P S Q Definitions: Quantity supplied--it is the amount that will be sold at a specific P. Supply--it is a schedule of quantities of goods and services that will be sold at various prices at a specified time, all other things held constant.

  21. GUESS HOW MANY DETERMINANTS OF SUPPLY THERE ARE? 5 And if you don’t memorize these variables, YOU WILL FAIL THIS CLASS!! ARE THERE ANY QUESTIONS?

  22. Five determinants of Supply: 1. # of suppliers 2. Costs 3. Physical Availability of Resources 4. Technology 5. Expected Future Prices by Consumer

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