Supply and Demand
Which way does the supply and demand curve shift when demand or supply increase?
To the right.
What are some characteristics of inelastic goods?
Not a lot of substitutes, usually a necessity.
How do price floor's create surpluses?
When the government sets a minimum price above the equilibrium there will be more supply than demand creating a surplus.
What is the difference between quantity supplied and supply?
Quantity supplied is always a number supply is always a line. (Same goes with demand)
When demand increases what happens to price and quantity sold? Decreases?
Increases- price up, quantity up.
Decreases- price down, quantity down.
What are some characteristics of elastic goods?
A lot of substitutes usually not a necessity (there are exceptions though)
How do price ceilings create shortages?
When the government sets a maximum price above equilibrium there will be greater demand than supply creating a shortage.
When price goes down for gasoline does demand actually go up?
No demand itself stays the same but the quantity demand goes up.
When supply increases what happens to price and quantity sold? Decreases
Increases price down quantity up
Decreases price up quantity down.
Why would a company want to know their elasticity of demand for the goods they sell?
A company would want to know if their good is inelastic because that means they can raise the price and still make more money.
When Party City closed all of their stores how did that affect the supply or demand of balloons and why?
Supply for balloons went down due to a decrease in the number of producers.
If a news report comes out saying that eggs are good for your health how and why does that affect the supply or demand of eggs?
Demand increase consumer taste, price up quantity up.
What happens to supply or demand of Jif peanut butter if Peter Pan peanut butter is on sell?
Demand goes down due to a related good.
With more people moving to Florida how does that affect the supply and demand for Publix products? And Why?
Demand Increase Population
If workers in a automotive factory go on strike how and why would that affect supply and demand for cars?
Supply goes down due to input cost price up quantity down
What happens to supply or demand of Tesla's if a tax credit for electric vehicles is going away in a couple of months and why?
In this case both supply and demand would increase expectation of future price.
If nationwide wages are down how does that affect the supply or demand of bicycles? Why
Demand goes down due to income and bicycles being a normal good.
If Ford realizes they can make more money selling SUV's and trucks than cars what happens to supply and demand for Ford cars and why?
Supply goes down due to a related good in production.