Market/Demand

Market

An arrangement between buyers and sellers for the sale and purchase of goods and services.

Demand

The ability and willingness to purchase a product

Market Demand

The total demand in a market (aggregation of indiviual demand)

Extension in Demand

A rise in quantity demanded due to a fall in price

Contraction in Demand

A fall in quantity demanded due to rise in price

Change in Demand

More or less of a product being demanded at any given price

Causes of Change in Demand

• Change in Income

• Change in Prices of Substitute and Complement Goods

• Changes in Age of Population

• Changes in Taste and Fashion

• Other factors

Inferior Good

Good that demand increases when income falls and vice versa

Supply

The ability and willingness to sell a product

Shift in Supply Curve

Causes of Change in Supply

• Changes in Cost of Production (Change in price or productivity of one of the factors of production)

• Technological Advancements

• Taxes

• Subsidies

• Changes in weather and health of livestock and crops

• Changes in Prices of other products

• Natural Disasters and Wars

• Depletion and discovery of Natural resources