DEMAND
a measure of the way quantity supplied reacts to a change in price.
ELASTICITY OF DEMAND
Import restrictions also affect supply; Import bans or import quotas are part of this non-price determinant.
GLOBAL
> 1 (greater than) =
ELASTIC
The supply is easily expanded or reduced; is which elasticity of supply
SHORT TIME
If there are few of these for a good, then even when its price rises greatly you may still buy it.
AVAILABILITY OF SUBSTITUTES
If you buy the same amount or just a little less of a good after a large price increase, your demand is
INELASTIC
Inflation plays a role in this non-price determinant
EXPECTATIONS
Exactly = to 1
UNITARY ELASTIC
Years to survive price changes versus weeks to adapt; which elasticity of supply is this
LONG TIME
how much of your budget your spend on the good.
If you buy much less of a good after a small price increase your demand
ELASTIC
If more supplier enter a market to produce a certain good, the market supply of the good will rise; which non-price determinant is this
# OF COMPETITORS
is a table that lists the quantity of a good that a person will purchase at various prices in the market.
DEMAND SCHEDULE
The point at which demand & supply come together
EQUILIBRIUM
a good people will always buy, even when the price increases.
NECESSITY
< 1 (less than) =
INELASTIC
shows the relationship between price and quantity supplied for a good or service, or how much of a good or service a supplier will offer at various prices.
SUPPLY SCHEDULE
add up demand schedules of every buyer in the market
MARKET DEMAND SCHEDULE
STABLE
Consumers do not always react quickly to a price increase, because it takes time to find substitutes.
CHANGE OVER TIME
to calculate elasticity, follow these 3 steps
supply schedules of individual firms in a market are added up
MARKET SUPPLY SCHEDULE
the demand curve shows what set of market conditions
ONE VERY SPECIFIC SET
both buyers and sellers benefit.
WHEN A MARKET IS A EQUILIBRIUM
these 2 affect the elasticity of supply
SHORT TIME & LONG TIME