Demand and supply
What is the law of demand?
Law of demand says there is an inverse relationship exists between price and quantity demanded, as long as other things do not change
Describe how a shift in consumer preferences can affect the demand curve.
If something becomes popular or trendy, people may demand it more of it
Demand increases, curve shifts to right
What three factors can cause a shift in the supply curve?
Production Costs
Number of Sellers
Technology
Natural Conditions
Price of related goods
What are the two differences between change in quantity demanded and change demand?
Change in Quantity Demanded
Caused by change in price.
Moving along an existing demand curve.
Change in Demand
Caused by change in other factors, not price.
Shift of the demand curve to the left or right.
What is equilibrium price & what does it indicate?
It’s the price where demand and supply curve intersect AND at which there is no shortage or surplus