Supply and Demand

When price of the good sold increases, supply increases as suppliers want to make more product.

When price increases, demand decreases.

Equilibrium - when supply and demand meet

Disequilibrium - when supply and demand don’t meet

Factors that could shift demand curve:

  • Changes in substitute price

  • Changes in consumer incomes

  • Consumer preferences

  • Advertising/branding

  • External shocks

  • Seasonality

Factors that could shift the supply curve:

  • Changes in production costs

  • Technological advancements

  • Indirect taxes

  • Government subsidies

  • External shocks