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AND SUPPLY
A desire to buy good or services accompanied
by ability and willingness to pay
LAW OF DEMAND
If a product’s price increases, the quantity
demanded for the good will fall and if the
price decrease, the quantity demanded for
the good will increases(c.p)
Demand schedule
shows the quantity demanded of a product at
a various price levels
Demand curve
shows the negative relationship between price
and quantity demanded(downward sloping)
Exhibit 1 Demand Schedule and Demand Curve
(a)
(b)
(a)
CHANGES IN DEMAND
-cause by the changes in other factors
-shift of the demand curve
1) Number of buyers
2) Tastes and preferences
3) Income
4) Buyers’ expectations of future prices
5) Prices of related goods
-Complementary goods
-Substitute goods
Exhibit 3 Shifts in the Demand Curve
LAW OF SUPPLY
If the products’ price increases, the quantity
supplied for the good will increase and if the
price is decrease, the quantity supplied will
also decrease
SUPPLY SCHEDULE
shows the quantity offered for sale by an
individual sellers at a various price levels
SUPPLY CURVE
a curve that shows a direct relationship
between price and quantity supplied and vice
versa.
Exhibit 8 A Supply Curve
MARKET SUPPLY
- total supply of all sellers
Exhibit 10 Deriving a Market Supply Schedule and a
Market Supply Curve
(a)
CHANGE IN SUPPLY
-cause by changes in factors other than
price
-Shifts by the supply curve
Exhibit 11 Shifts in the Supply Curve