econ 202 - chapter 4: Market forces of supply and demand

so ican economize

Law of demand

if we raise prices of a product, the quantity demanded [qd] of the product will lower; demand is NOT the same as quantity demanded

Law of supply

if the price of a good rises the quantity supplied of that good increases

The study of economics

Society manages its scarce resources; scarcity - limited nature of society’s resources

substitute good prices increase

d1→d2; upward movement

related good price increases

d1→d3; downward movement

price of related products

shifts the demand curve

price expectations

shifts the demand curve

income

shifts the demand curve

tastes

shifts the demand curve

number of buyers

shifts the demand curve

prices of inputs

shifts the supply curve

prices of related goods

shifts the supply curve

number of suppliers

shifts the supply curve

technological improvements

shifts the supply curve

expectations of future price

shifts the supply curve

increase the demand curve

shifts up and right

decrease the demand curve

shifts down and left

increase the supply curve

shifts down and right

decrease the supply curve

shifts up and left