W2 : demand and supply

market

the buyers of a group determine the demand for the product

The sellers as a group determine the supply of the product

competitive market:

Price and quantity are determined by all buyers and sellers as they interact with the marketplace

buyers want to buy for less, sellers want to sell for more

revenue

price X quantity

law of demand

the lower the price, the more product/ services bought

demand curve

downward slope ,graph that shows the relationship between the price of a good or service and the quantity demanded within a specified time frame.

movement along demand curve

• Increase - demand curve shifts to the right

• Decrease - demand curve shifts to the left

causes of shifts in demand curve

subsitites ( ex pepsi goes up can buy coke instead)

compliments: if one does down so does other

trends, # of buyers,& adds

law of supply

will want to sell more products if price is higher

supply curve

upward, shows relationship of price and quantity

shifts in supply curve

• increase - supply curve shifts to the right (down )

• decrease - supply curve shifts to the left (up)

causes for shifts in supply curve

tech, price expectations, # of sellers , events

Equillibrium

quantity supplied equals quantity demanded

eq price

market price where the quantity of goods supplied is equal to the quantity of goods demanded.

eq quantity

when there is perfect amt of product

dis equilibrium

either to much or to little, need price to match demand and demand match price

change in demand means..

that the entire demand curve shifts either left or right.