Economics Notes: Demand and Supply
1. Demand
Definition: The quantity of a good or service that consumers are willing
and able to buy at various prices over a period of time.
Law of Demand: As price decreases, quantity demanded increases
(inverse relationship).
Demand Curve: Downward sloping.
2. Determinants of Demand (Shift Factors)
Income
Price of substitutes and complements
Tastes and preferences
Population size
Expectations about future prices
3. Supply
Definition: The quantity of a good or service that producers are willing
and able to sell at various prices.
Law of Supply: As price increases, quantity supplied increases (direct
relationship).
Supply Curve: Upward sloping.
4. Determinants of Supply (Shift Factors)
Production costs
Technology
Number of sellers
Government taxes and subsidies
Weather (for agriculture)
5. Market Equilibrium
