ECON Non-Price Determinants of Supply And Demand

Input costs

Supply; input cost and supply have inverse relationship, input cost increases → production cost increases → supply decreases

Labor productivity

Supply; amount of goods and services a person can produce, better workers increase supply

Technology

Supply; better technology always increases supply

Government action

Supply; taxes decreases supply, subsidies increase supply

Producer expectations

Supply; use market research to predict prices for a product

Number of producers

Supply; successful producers increase supply

Government regulation

Supply; decrease supplies because government limits suppliers

Consumer income

Demand; as income increases, demand increases, more money → more wants

Consumer tastes and preferences

Demand; likes and dislikes of consumers

Price of related products

Demand; substitutes (chicken and beef), complementary (hot dog and hot dog buns)

Market size

Demand; changes in number of consumers directly proportional to demand

Consumer expectations

Demand; the behaviors/results/actions individuals anticipate when purchasing a product