Demand and Supply Flashcards
What is demand?
The willingness and ability of a consumer/buyer to be able to purchase products or services at a particular point in time
State the law of Demand
The lower the price the higher the quantity demanded of the commodity and vice versa
What is a demand curve?
A graphical representation that shows the relationship between quantity demanded and price assuming other things constant
How is the demand curve sloped?
It is negatively sloped because of the law of demand
List 5 factors affecting demand
- Price
- Income of consumer
- Consumer Preferences
- The availability of Substitutes
- Price of related goods
What causes a change in the Quantity demanded?
Every other factor other than the price
What causes movement along the demand curve?
Price
What causes a shift in demand curve?
Everything other than Price.
What shows the reduction in quantity demanded in constant price?
Inward Shift
What shows the increase in quantity demanded in constant price?
Outward Shift
What is supply?
It’s the amount of goods/services is willing and able to produce and supply at a given price at a particular point in time
List some of the things that shift the supply curve
- Technology
- Input /Production cost
- Government Regulations
- Prices
Define Positive Relationship
It is when 2 variables are moving in the same direction either upwards or downwards. i.e. high prices, high supply
