Demand, Supply and Market Equilibrium
3 important questions on Demand, Supply and Market Equilibrium
What factors alter the demand for a good?
The determinants of the demand:
- consumers' preferences
- number of consumers
- consumers' incomes (inferior/normal goods)
- prices of related goods (substitutes and complementaries)
- expected prices
What is the difference between change in demand and change in quantity demand?
The first is a change in the demand curve, meaning the ratio between price and quantity changes. The second means there is a change in the place on a fixed demand curve. The ratio remains the same.
What six factors change the amount supplied of a good? (besides price)
The determinants of supply:
- resource prices
- technology
- taxes and subsidies
- prices of other goods
- expected prices
- number of sellers
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