Covers the basics of the law of supply and demand, as well as some of the factors of production and demand.

2. • Quantities of a particular good or
service consumers are willing and
able to buy at different possible
prices.

3. • Consumers buy more of a good when
its price decreases and less when its
price increases.
When price Demand When price Demand
goes up… goes down… goes down… goes up…

5. 1. Changes in income (the income
effect)…
when income consumers
goes up buy more
when income consumers
goes down buy less

6. 2. Prices or availability of substitutes
(substitution effect)…
a substitute is a good that can be used
•
in place of another.
or

7. 3. Prices or availability of
complementary goods...
complementary goods are things that
•
are often are sold or used together
&

8. 4. Changes in the number of buyers...
more
people
(buyers),
more sales

9. 5. Changes in tastes & preferences…
then… now…

10. • Supply: The amount of a product
that is offered for sale at all possible
prices in the market.

11. • Tendency of suppliers to offer more
of a good at a higher price and less at
lower prices.
When price Supply When price Supply
goes up… goes up… goes down… goes down…

13. • The law of demand
describes how
price affects
CONSUMERS…
• And the law of
supply describes
how price affects
PRODUCERS

14. 1. Cost of inputs (factors of
production)…
when production supply
costs go up goes down
when production supply
costs go down goes up

15. 2. Changes in productivity…
when productivity supply
goes up goes up
when productivity supply
goes down goes down

16. 3. Change in the number of sellers in
the market…
More sellers in a market = increase
•
supply.
Fewer sellers in a market = decrease
•
supply.

17. • The equilibrium price is where
supply & demand intersect.
equilibrium
price