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
- Demand
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