1.2.1 Demand and supply

• Demand is the quantity of good that consumers are willing and able to purchase at various prices during a period of time.
• Relationship between price and quantity demanded is called demand curve
• TICS


  tastes, income, compliments, substitutues/seasonality
• Factors leading to change in demand

  changes in prices of substitutes and complementary goods

  changes in income

  fashion, tastes, preferences

  advertising and branding

  demographics

  external shocks

  population

  price
• Increase in demand moves curve right and up and decrease in demand moves curve left and down
• Factors leading to change in supply

  changes in cost of productions

  new technology

  indirect taxes

  government subsidides

  external shocks
• need to do something on demand and supply graphs xx