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Law of Demand
If Price increases Quantity demanded decreases
If Price decreases, Quantity Demanded increases
Diminishing Marginal Utility
As you buy more of a good, utility of subsequent units declines
Demand Determinants
(ENTIR)
Expectations, Number of Consumers, Tastes, Income, Related Goods (complements and substitutes)
Change in Price causes Change in Quantity Demanded
Supply Determinants
(ROTTEN)
Resource Prices, Other Goods, Technology, Taxes and Subsidies, Expectations, Number of Suppliers
change in prices causes change in quantity supplied
Shortage
Price increases, Quantity increases
Surplus
Price decreases, Quantity decreases
Effective price floor creates
a surplus
effective price ceiling creates
a shortage
If supply and demand increase, what happens to price and quantity?
Price is indeterminant, Quantity increases
If supply and demand decrease, what happens to price and quantity?
Price is indeterminant, quantity decreases
If supply increases and demand decreases, what happens to price and quantity?
Price decreases, Quantity is indeterminant
If supply decreases and demand increase, what happens to price and quantity?
Price increases, Quantity is indeterminant
Note 
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