+ Supply and Demand Why are some goods produced and not others?
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Transcript of + Supply and Demand Why are some goods produced and not others?
+Law of Supply
Suppliers will offer MORE of a good or service is at a higher price and LESS of the good or service at a lower price.
Price goes up.... SUPPLY goes up
Price goes down.. Supply goes down
+Factors of Supply
1. Cost of production As costs INCREASE to create the good…. Supply
DECREASES
2. Change in productivity When productivity INCREASES….. Supply INCREASES
3. Change in competition INCREASE in sellers….. Supply INCREASES
+What is demand?
How much of a good or service that consumers are willing and ABLE to buy at different prices.
+Law of Demand
Consumers will buy MORE at a price decrease and LESS when the price increases
Price up….. Demand down Price down….. Demand up
+Factors of Demand
1. Change in Income As income INCREASES……. Demand INCREASES
2. Price of substitute If there is a similar good for a lesser price… Demand
DECREASES
+Factors of Demand Cont’d
3. Price of complimentary goods INCREASE in price of complimentary good… DECREASE in
demand of original good.
4. Change in number of consumers INCREASE in population….. INCREASE in demand