Week 10 - Equilibrium Influencers

Question 1

What is the term for factors from external sources that influence demand?

Answer 1

Exogenous

Question 2

What factors increase demand which increases the equilibrium point?

Demand is higher at each possible price point (therefore demand curve shift)

Answer 2

1. Increase in number of consumers demanding product or market size

Question 3

What is the difference between ‘increase in supply/demand’ and an ‘increase in the quantity supplied/demanded’?

Answer 3

An increase in supply/demand is when there is a physical shift of the curve.

An increase in the quantity supplied/demanded is when you move along a curve to a new point.

Question 4

What factors increase the supply curve which shifts the equilibrium point?

Answer 4

An improvement in technology will lower the marginal cost at each quantity, and given that the MCC = S, this would mean the supply curve shifts outwards or increases at each price point.

Question 5

What do taxes do?

Answer 5

It shifts the supply curve upward because the price at every quantity is increased with the tax