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THE MARKET FORCES OF S & D - Coggle Diagram
THE MARKET FORCES OF S & D
Market & competition
A market is a group of buyers & sellers of a particular good @ service
A competitive market is a market in which there're many buyers & sellers so that each has a negligible impact on the market price
Demand
Qd is the amount of a good that buyers are willing & able to purchase
Law of D
P rise, Qd fall
The income effect
The substitution effect
Qd = a - bP
Demand schedule is a table that shows the relationship btw the P of the good & the Qd
Demand curve is a graph of the relationship btw the P of a good & the Qd
Change in Qd
Movement along the D curve
Change in the price
Shift to the left or right
Consumer income
Income increase, D for normal good increase
Income increase, D for inferior good decrease
Substitutes
When a fall in the P of 1 good reduces the D for another good
Complements
When a fall in the P of 1 good increase the D for another good
Supply
Qs is the amount of a good that sellers are willing & able to sell
Law of S
Other things =
Qs rise, P rise
Qs = c + dP
Supply schedule is a table that shows the relationship btw the price of the good & the Qs
Supply curve is the graph of the relationship btw the P of a good & the Qs
Change in S
Shift to the left or right
Change in a determinant
When things happen that make producers want to produce > or < goofs at all selling P
The cost of production
The min wage go up & labour is > expensive, so the S curve will shift to the left
The profitability of alternative products
Substitution
The profitability of goods in joint S
Technology
Better technology make the S curve shift to the right
Producers produce >
Taxes
If the good is taxed by the gover then the firm gets < for each other unit of output
Produce less
Subsidies
Cost <, firm produce >
Nature & unpredictable events
The aims of the producers
Expectations of future price changes