2 5 2024 Determinants of Demand Factors that Shift the Demand Curve Determinant Examples Change in buyers tastes Physical fitness rises in popularity increasing the demand for jogging shoes and bicycles smartphone popularity rises reducing the demand for landline phones A decline in the birthrate reduces the demand for children s toys Change in the number of buyers Change in income Change in the prices of related goods A schedule or curve that shows the various amounts of a product that producers are willing and able to make available for sale at each of a series of possible prices during a specified Supply period of time Individual supply Market supply The market supply is the addition of all Individual supplies Demand is faster than supply b c supply requires inputs outputs and production rather than desire Law Of Supply Other things equal as the price rises the quantity supplied falls And as the price falls the quantity supplied falls Ex Price acts as an incentive to producers At some point costs will rise Change in product price is along the supply curve The price of lemonade changes along Changes in other factors shift the curve Less lemons less lemonade Determinants of Supply A change in resource prices A change in technology A Change in the number of sellers A Change in taxes and subsidies A Change in prices of other goods A change in producer expectations Equilibrium occurs when the demand curve and supply curve intersect Market Equilibrium Equilibrium price and equilibrium quantity Supply and shortage Surplus Is above the equilibrium and shortage is under the equilibrium Buying fast in the shortage buying slow Rationing function of prices Efficient allocation Price ceiling is the maximum amount you are legally allowed to charge under the Price Equilibrium Price Floor is the minimum amount you are legally allowed to to charge Ex Minimum wage always cause a surplus Price is below equilibrium shortage Price is above equilibrium surplus
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