Supply + demand graphs

Factors affecting Price elasticity of demand

Measure of responsiveness of demand to changes in price

• Availability of substitutes

• Branding

• % of total expenditure

• Addictiveness of product

• Durability of product

• Time period

Factors affecting Price elasticity of supply

Measurement of responsiveness of supply to changes in price

• Spare capacity

• Legal constraints

• Mobility of factors of production

• Availability of stock

• Time period

Causes of shifts in demand curve

How much consumers are willing and able to purchase at a certain price level

• Price of substitute/complementary goods

• Real income

• Advertising

• Taste

• Size and age of population

PRATSA

Causes of shifts in supply curve

How much producers are willing and able to produce at a certain price level

• Cost of production

• New technology

• Indirect taxes

• Government subsidies

• Natural disasters