Facts Flashcards
1
Q
Factors causing shift in demand curve
A
Normal goods - ppl demanding more of if their real income increases
Inferior goods - ppl demand less of if their income increases
More equal distribution of income
2
Q
Why is increased prices good for marginal firms
A
Profitable for marginal firms (firms that are just breaking even) to supply the market increasing market supply levels
3
Q
Factor affecting price elasticity of demand
A
Substitutes
Type of good (non essential)
Percentage of income spent on good
Time
4
Q
Factors in supply
A
Changes to cost in production Improving technology Changes to the productivity of factors of production Indirect tax/subsidy Changes to the price of another good No of suppliers
