Please enable JavaScript.
Coggle requires JavaScript to display documents.
THE MARKET FORCES OF SUPPLY AND DEMAND - Coggle Diagram
THE MARKET FORCES OF SUPPLY AND DEMAND
Supply Curve Shifter
Technology
Production of related goods
Competitive supply
Government policy
Changes in supply
The lower cost of production, supply is rises
Joint supply
Price of factors inputs
Firms supply a larger quantity
The supply curve shifts to the right
Number of supplies
Increases the quantity supplied
Shifts supply curve to the right
Supply
Market supply
Sum of the supplies of all sellers of a good or services.
Market supply curve : horizontally
The law of supply
The prices of a good rises, the quantity supplied of the good rises
The price falls, the quantity supplied falls.
Quantity supplied
Sellers are willing and able to sell
Amount of a good
Prices and output determination
Shift curves
A shift in the supply curve is called a change in supply
A shift in demand curve is called change in demand
Movement along curves
A movement along a fixed supply curve is called a change in quantity supplied
A movement along a fixed demand curve is called a change in quantity demanded
Surplus
When price > equilibrium price, the quantity supplied > quantity demanded
Shortage
When price < equilibrium price, the quantity demanded > the quantity supplied
Equilibirum
Refers to a situation in which the price has reached the level where quantity supplied = quantity demanded
Supply and Demand together
Equilibrium price
The price that balances quantity supplied and quantity demanded
On a graph, it is the price at which the supply and demand curves intersect
Equilibrium quantity
On a graph, it is the quantity at which the supply and demand curves intersect
The quantity supplied and the quantity demanded at the equilibrium price
Market structure
Market
Buyers
: determine the demand for the product
Sellers
: determine the supply for the product
The 4 types
Perfectly competitive market
(many buyers & many sellers, price takers)
Monopoly
(seller 1 & many buyers, price makers)
Oligopoly
(fewer sellers & many buyers, price maker)
Monopolistic competition
( many buyers and many sellers, price maker)
Demand
Quantity demanded
Amount of a good that buyers are willing and able to purchase
The law of demand
The price of a good rises, the quantity demanded of good falls.
The price falls, the quantity demanded rises.
Market demand
Sum of individuals demands for a good services.
Market demand curve : horizontally
Demand curve shifters
Expectations about the future
An increase in income, increase in current demand
Higher prices, increase in current demand
Price of 2 related goods
Substitutes (increase)
Complement (decrease)
Income
Normal good
(shifts demand curve to the right)
Inferior good
(shifts demand curve to the left)
The number of buyers
Increase
Increase quantity demanded
Shifts demand curve to the right
Decrease
Decrease quantity demanded
Shifts demand curve to the left
The demand curve
Shows how price affects quantity demanded, others things being equal