Demand- is quantity's that people are willing to buy at various prices
Supply- is quantity's that producers or sellers are willing and able to produce at various prices.
The law of demand- there is an inverse relationship between price and quantity demanded
The law of supply- direct relationship between price and quantity supply (P▲, Q▲)
What causes a "change in quantity demanded (▲QD) and "change in quantity supplied (▲QS)
- PRICE
What causes a "change in demand" (▲D)
1. ▲ in buyers taste (advertisement)
2. ▲ in # buyers (population)
3. ▲ in income (normal or inferior goods)
4. ▲ in price of related goods (complementary or substitute)
5. ▲ in expectations
Normal goods- items that you buy when your not ballin with extra money
Inferior gods- items that you would not normal buy unless your ballin
Complementary- something that goes with the item or completes it (hotdog and bun)
Substitute- something that replaces a object that serves the same purpose (Coke and Orange juice)
What causes a "change in supply" (▲S)
1.▲ in weather
2.▲ in number of supplyers
3.▲ in technology
4.▲ in cost of production
5.▲ in taxes and subsidarys
6.▲ in expectations
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