Relationship between demand, supply and price

• Demand is the amount society is willing and able to buy at a set price at a given point in time.
• A normal good is one where, if price rises, demand will fall and vice versa i.e. there is a negative correlation.
• The two variables price and demand move in the opposite direction to each other.
• The relationship between price and quantity demanded can be shown using a demand curve.
• A demand curve is a graphical representation of the relationship between price and quantity demanded.
• The demand curve shows the quantity demanded for a good, at any given price, over a period of time.

  ->As price falls quantity demand rises

  ->As price rises quantity demand falls.
• Demand Curve:

  
• Influence on demand:

  
• Affordability- Influence on demand

  
• Competition- Influence on demand

  
• Substitutes and Complementary Goods- Influence on demand

  
• Level of GDP- Influence on demand

  
• Needs and Aspirations of Consumers- Influences on demand

  
• What is supply?

  
• The Supply Curve:

  
• Influences on Supply:

  
• Influences on Supply(2):

  
• Influences on Supply(3):

  
• Introduction of new technology:

  
• Price Elasticity of Demand:

  
• Price Elasticity of Demand:

  
• Factors influencing PED:

  
• Factors influencing PED:

  
• Significance of PED:

  
• Problems forecasting price elasticity of demand: