BS3- Demand And Supply Flashcards
Identify the definitions for demand and supply
demand- the quantity that people can and will purchase products at at certain prices
Supply- the quantities that are offered at each price point
If their is an excess demand in a market, what is the impact on price?
An excess in demand will cause the price to rise
What happens to demand when price goes up
If price goes up the quantity demanded goes down. Therefore equilibrium moves to the left
What happens to supply when price goes down
The quantity supplied will decrease due to an equilibrium price fall
How is equilibrium established
It is the situation in a market when demand is equal to supply
How does an increase in income affect demand
If people’s income is more then they are able to buy more products and a higher quantity of them, therefore quantity goes up
Three other factors that affect demand
Trends
Seasonal/ weather
Price of the product
Explain how a decrease in competition in the market impacts supply.
It will mean there is more supply for the other business
Three other factors that impact supply
Price
Government policy’s
Price of other goods
State what is meant by elasticity of demand
It shows how responsive demand is to a change in price
Identify three elastic products
Soft drinks
Cars
Expensive Clothing
