DETERMIN
ANTS O
F
SUPPLY
AND D
EMAND
DETERMINANTS OF SUPPLY AND DEMANDFactors that change the quantity demanded or supplied
DETERMINANTS OF DEMAND
1.Consumer preferences2. Market Size3. Income4. Price of related goods5. Consumer Security
CONSUMER PREFERENCES
Tastes changeWhat are some examples of tastes changing and therefore changing the amount of a product that is demanded?
MARKET SIZE
The amount of people to buy the product may change
What is a situation where this may occur?
INCOME
As the average income goes up or down, sales for products will also change
What is an example of this happening?
PRICES OF RELATED GOODS
Substitutes- products easily replaced with others
Complements- products purchased together
What are some substitutes and complements?
CONSUMER SECURITY
If you feel good or anxious about future- it will affect how you spend money
Give examples
DETERMINANTS OF SUPPLY1. Technological
improvement2. Resource prices3. Taxes and subsidies4. Competition
TECHNOLOGICAL IMPROVEMENTIf productivity can increase
RESOURCE PRICES
If prices of what goes into the product go up or down
Steel shortage?
TAXES AND SUBSIDIES
Subsidy- monetary grant to a business to help ease production or develop a new product
Taxes- add to production costs
COMPETITION
More producers enter the market