15&16. Demand and supply

Question 1

What is demand?

Answer 1

The amount of product/service that consumers buy at a stated price within a period of time

Question 2

What is supply?

Answer 2

The quantity of a product/service supplied at a stated price by all providers in the market

Question 3

What is an equilibrium Point?

Answer 3

The price at which the quantity demanded by the consumer is equal to the quantity supplied

Question 4

Factors that influence demand:
Point out 3 of these

Answer 4

Price
Advertising
Substitutes
Incomes
Fashion trends
Interest Rates (if interests high, demand drops)
Complements (fish and chips)

Question 5

Factors that influence supply:
Point out 3 of these

Answer 5

Productivity
Indirect taxes
Number of firms in the market
Technology (if machines improve supply decreases)
Weather (if its hot, ice cream is in high demand)
Cost of production

Question 6

Substitute goods

Answer 6

Two alternative goods that could be used for the same purpose eg tea or coffee

Price for a product increases then demand for a substitute product will increase causing demand curve for substitute to shift right (increase)

Question 7

Complementary goods

Answer 7

Products which are bought and used together eg fish and chips

Demand for one product increases then demand for the complementary product also increases causing demand curve for complementary products to shift right