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Demand/Supply Curve - Coggle Diagram
Demand/Supply Curve
Supply
Quantity of a good or service that a producer is willing and able to supply onto the market at a given price in a given time period
Basic law - as the market price of a commodity rises, so producers expand their supply onto the market.
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Shifts
Changes in production costs:
- wage costs
- raw materials and components
- energy costs
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Joint
Two products are in joint supply when a rise in the output of one product leads to a rise in the supply of the other product
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Demand
the quantity of a product consumers are willing and able to buy at different prices in a specified time period.
Normally there is an inverse relationship between the price of good X and quantity demanded of good X
Factors Affecting
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Prices of other goods and services
- substitute goods
complementary goods
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Types
Effective Demand: when consumers' desire to buy a product is backed up by an ability to pay for it - real purchasing power
Latent Demand: exists when there is willingness to purchase a good, but where the consumer lacks the real purchasing power to be able to afford the product
Derived/joint Demand: demand for product X may be linked to the demand for related product Y - e.g. coal and demand for energy or housing market
Complementary Demand: as demand for mobile phones increased, so too does demand for phone calls.
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Shifts
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Outwards:
Rise in real income of consumers
Increase in price of substitute good
Fall in price of complementary good
Change in consumer preference
Fall in interest rates
Rise in consumer confidence
