LAW OF SUPPLY Flashcards
Consumer market
Consumption is for individual use (consumer product)
Business, Organizational, Institutional Market
used for another good/service (industrial product)
Market Segmentation
Primary customers- high demand
Secondary customers- fewer demand
Ex. school supplies.
student- high demand
teacher- fewer demand
Law of Supply and Demand
The law of supply and demand explains the interaction between the sellers of a product and the buyers. It shows the relationship between the availability of a particular product and the demand for that product has on its price.
Supply
refers to the quantity of goods that the seller is willing to offer for sale.
Supply schedule
The supply schedule shows the different quantities the seller is willing to sell to different prices.
Supply Function
shows the dependence of supply on the various determinants that affect it. Qs: c+ d(P)
Supply Curve
a graphic illustration of the relationship between price, the vertical axis (Y), and quantity supplied, shown on the horizontal axis (X).
Law of Supply
demonstrates the quantities that will be sold at given price. The higher the price, the higher the quantity supplied and vice versa.
Factors Affecting Supply of a Commodity
- Price of production inputs
- Taxes
- Technology
- Expectation
Equilibrium price
the price at which the producer can sell all the units he wants to produce, and the buyer can buy all the units he wants.
Market is in equilibrium
When the supply and demand curves intersect
