supply and demand

• factors causing shifts in supply

  costs of production - if increase producers have less incentive to supply to market, if decreases supply curve shifts to left so proce will increase as scarcity increases

  weather - mainly agricultural good weather menans harvest yields high so supply more, bad weather damages harvest yields so low level of supply

  gov legislation - government might be encouraged to raise taxes and duties imposed on goods which impacts on manufactures to rise cost
• supply is the amount of a good/service that a producer willing to out on the market higher the price higher level of supply producer will provide
• when considering supply amount they consider cost and price they receive as it attracts additional supply
• law of demand is as price falls from P1 to P2 then the level of quantity demanded rises from Q1 to Q2 so inverse relationship between price and qauntity
• if any other factor then price changes then the entire demand curve shifts if increases goes to the right if decreases goes to the left
• factors influencing demand

  consumer income - higher means more disposable income

  successful marketing - attracts customers

  changing population - if rises demand rises as ageing populations elderly products demand increased

  substitute good - alternatives for others like Pepsi and coke

  complimentary goods - price increases so demand for complimentary decreases

  changes in price - if up or down could be good/bad depends on elasticity
• demand is amount of consumers who desire to purchase a product at various prices - not necessarily will buy it

  effective demand - both willing and able to purchase
• the only factor that can cause movement along demand curve is price
• market equilibrium is point where supply and demands meet, its the expected state that markets will reach
• disequilibrium is where supply doesn't equal demand