Factors that Determine Supply & Demand:
What are the factors that determine “supply”?
“P.I.G. T.O.E.S.”
P for productivity (workers, machines, and/or assembly), I for inputs (change in the price of materials needed to make the good), G for government actions (subsidies, taxes, and regulations), T for technology (improvements in machines and production), O for outputs (price changes in other products), E for expectations (outlook for the future), and S for size of industry (number of companies in the industry).
What are the factors that determine “demand”?
"P.O.I.N.T."
P for Price of other goods (substitute or complementary), O for Outlook (consumer expectation of the future), I for Income (normal goods vs. inferior goods_, N for Number of potential customers (pop. of market), and T for Taste (fads or trends).
