The Supply & Demand Curve Flashcards
What does the demand curve show?
Show the quantity that is demanded at any given price.
What happens on the demand curve if there is a change in price?
It moves along the curve
If a factor other than price changes what happens to the demand curve?
It shifts RIGHT - Increase
LEFT - Decrease
What factors cause a shift in demand?
- Population
- Advertising
- Income
- Complementary (Change in price)
- Change in price of a substitute good
What does the supply curve show?
It shows the amount producers are willing and able to supply at a given price.
What factors affect the supply curve?
- Changes in the cost of production
- Natural Factors eg/ the effect of weather on crops.
- Government taxes and subsidies
What happens to the supply curve when supply in increases?
RIGHT - Increases
What happens to the supply curve when supply decreases?
LEFT - Decreases
Factors that cause a shift in the supply curve?
- Cost of Production (Raw Materials)
- Technology
- Government (Taxes / Subsidies)
- Natural Factors (Drought / Floods)
Define Demand.
Is the quantity of goods/ service that will be brought at any given price over a period of time.
What does Ceteris Paribus Condition mean?
Is if everything else were to remain the same, ie, nothing would interfere.
What is Extension of Demand?
When the quantity demanded RISES
What is Contraction of Demand?
When the quantity demanded FALLS.
What are Conditions of Demand?
Factors that can change demand.
Define Supply
Is the quantity of goods sellers are prepared to sell at any given price over a period of time.
