unit_3_overview_guide.docx | |
File Size: | 20 kb |
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Demand is the desire, ability and willingness to purchase a product.
The Law of Demand states that there is an inverse relationship between price and quantity demanded. Change in demand happens for reasons other than a change in price: - seasons, change in income, substitute/compliment goods, weather, health reports, recalls, reputation, consumer tastes, etc. Demand curves slope down and to the right, which illustrates the price effect of demand. As price goes down, quantity demanded goes up. |
Supply is the amount of goods offered for sale.
The Law of Supply states that there is a parallel relationship between price and quantity supplied. Change in supply happens for reasons other than a change in price: - seasons, cost of inputs, technology, taxes and subsidies, number of sellers, government regulations, productivity of workers, demand. Supply curves slope up and to the right, which illustrates the price effect of supply. As price goes up, quantity supplied goes up. |
unit_3_review_sheet.doc | |
File Size: | 24 kb |
File Type: | doc |