Factors that will shift the demand curve left or “in”

People buy less at each price!!1. Decrease in income2. Price of substitute falls3. Price of compliment increases4. Poor product expectations5. Expect price to fall

Shift the demand curve right or “out” are exactly the opposite!

People will buy more at each price!!1. Increase in income2. Price of substitute rises3. Price of compliment decreases4. Good product expectations5. Expect the price to remain the same/increase

Factors that shift supply curves left or “in”1. A decrease in producers2. A decrease in technology3. An increase in input cost4. An increase in the price of a related output

Factors that shift supply curves right or “out”1. An increase in producers2. An increase in technology3. A decrease in input cost4. A decrease in the price of a related output

Supply Curve shifter/mover: (SI=Shift in; SO=shift out; M=mover)______ 1.) Ford installs new technology meant to lower production costs by 20%.______ 2.) Federal government requires a metal connection instead of plastic for all child safety seats.______ 3.) Old Navy increases all of its prices by 5%.______ 4.) Computer chips for Dell computers drop in price.______ 5.) Cost of shipping goes up for Mattel.

SO

SI

M

SO

SI

Demand Curve shifter/mover: (SI=Shift in; SO=shift out; M=mover)______ 1.) Ford lowers the price of their Escape.______ 2.) “Frankenstorm” hits and threatens power outages which has what effect on the demand curve for batteries?______ 3.) What will happen to the demand curve of Kindle Fire if Apple lowers the prices on their iPads?______ 4.) Mattel lowers the prices of toys for the holiday shopping season.______ 5.) There is a “health tax” imposed on all soda in NYC. What happens to the demand curve for Pepsi products in NYC?

MSO

SI

M

SI

Please put an “S” for substitute or a “C” for complement:_____ 1.) Wegman’s brand coffee and Folgers_____ 2.) Coke and Pepsi_____ 3.) Hammer and nails_____ 4.) Spaghetti and bread

Demand curves are only dependent on what? __________________

____________________ always goes on the x-axis and ____________________ always goes on the y-axis for supply and demand curves.

SSCC

PRICE

QUANTITYPRICE

1.00

2.00

3.00

0

4.00

5.00

50 100 150 200 250 300

D2D1S1 S2

Quantity in gallons

GasolinePr

ice

per g

allo

n

What is the equilibrium price 1: ________

What is the equilibrium price 2: ________

What does equilibrium price really tell us?

$4.65

$4.60

Where the market is in balance for that product

Demand is considered ______________ when a change in price leads to a LARGE change in quantity demanded. Give three examples: ______________________________________________Now draw what this type of curve would look like: (remember to label your axis)

IPODS, BOOKS, DVD’S

ELASTIC

P

Q

Demand is considered ______________ when a change in price leads to a SMALL change in the quantity demanded. Give three examples: ______________________________________________Now draw what this type of curve would look like: (remember to label your axis)

INELASTIC

GAS, SALT, BABY FORMULA

P

Q

a. discourage consumers from buyingb

.discourage producers from leaving a market

c. motivate consumers to buyd

.motivate producers to enter a market

_______ Lower prices generally

a.

gain a bigger share of the market

b.

increase their employee salaries

c.

prepare for bankruptcy

d.

reduce their share of the market

_______ Companies engage in competitive pricing to