Determinants of Supply and Demand

Demand Normal Good: If income increases what will happen.

Increase in Demand

Demand Normal Good: If income decreases what will happen.

Decrease in Demand

Demand Inferior Good: If income increases what will happen.

Decrease in Demand

Demand Inferior Good: If income decreases what will happen.

Increase in Demand

Demand Complementary Good: If price of good A increases what will happen to good B

Decrease in Demand

Demand Complementary Good: If price of good A decreases what will happen to good B

Increase in Demand

Demand Substitute Good: If price of good A increases what will happen to good B

Increase in Demand

Demand Substitute Good: If price of good A decreases what will happen to good B

Decrease in Demand

Demand Taxes: If taxes on good increase what will happen to demand

Decrease in Demand

Demand Taxes: If taxes on good decrease what will happen to demand

Increase in Demand

Demand Subsidies: If subsidies increase what will happen to demand

Increase in Demand

Demand Subsidies: If subsidies decrease what will happen to demand

Decrease in Demand

Demand Expectation: If price is expected to Increase what will happen to demand

Increase in Demand

Demand Expectation: If price is expected to decrease what will happen to demand

Decrease in Demand

Demand Market Size: If the number of buyers increases what will happen to demand

Increase in Demand

Demand Market Size: If the number of buyers decreases what will happen to demand

Decrease in Demand

Supply Cost of Inputs: If Cost of Inputs Increases what will happen to Supply.

Decrease in Supply

Supply Cost of Inputs: If Cost of Inputs Decreases what will happen to Supply.

Increase in Supply

Supply Complementary Good: If price of good A increases what will happen to good B

Increase in Supply

Supply Complementary Good: If price of good A decreases what will happen to good B

Decrease in Supply

Supply Substitute Good: If price of good A increases what will happen to good B

Decrease in Supply

Supply Substitute Good: If price of good A decreases what will happen to good B

Increase in Supply

Supply Technology: If technology causes production to increase what will happen to supply

Increase in Supply

Supply Technology: If technology causes production to decrease what will happen to supply

Decrease in Supply

Supply Taxes: If taxes on good increase what will happen to Supply

Decrease in Supply

Supply Taxes: If taxes on good decrease what will happen to Supply

Increase in Supply

Supply Subsidies: If subsidies increase what will happen to supply

Increase in Supply

Supply Subsidies: If subsidies decrease what will happen to supply

Decrease in Supply

Supply Expectation: If price is expected to Increase what will happen to supply

Decrease in Supply

Supply Expectation: If price is expected to decrease what will happen to supply

Increase in Supply

Number of Firms: If number increases then what will happen to supply

Increase in Supply

Number of Firms: If number decreases then what will happen to supply

Decrease in Supply

Availability of Substitutes: If there are many substitutes what will happen to elasticity of demand

more elastic

Availability of Substitutes: If there are few substitutes what will happen to elasticity of demand

less elastic

Proportion of income: If it is a high proportion of Income what will happen to elasticity of demand

more elastic

Proportion of income: If it is a small proportion of Income what will happen to elasticity of demand

less elastic

Length of Time: If there is more time what will happen to elasticity of demand

more elastic

Length of Time: If there is less time what will happen to elasticity of demand

less elastic

To maximize total revenue, if the point was at an elastic point (x>1) what should we do to price?

lower price

To maximize total revenue, if the point was at an inelastic point (x<1) what should we do to price?

raise price

What is the midpoint formula?

[(Q2-Q1)/(Q1+Q2/2)]/[(P2-P1)/(P1+P2/2)]

Cross Price elasticity of demand?

%change in quantity X/%change in price Y

Income elasticity of demand?

%change in quantity/%change in income