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Supply Shift Factors

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Updated 2007-02-02 01:44

Supply

Changes in Demand

Shift FactorsDemand Shifts to LeftDemand Shifts to Right
$ of Substitutes$ of Substitutes Decrease$ of Substitutes Increase
$ of Complements$ of the Complements Increase$ of Complements Decrease
Income: NormalGood is normal and come decreaseThe good is normal and income Increase
Income: InferiorThe good is inferior and income IncreaseThe good is inferio and income Decrease
PopulationPopulation DecreasesPopulation Increases
Consumer Expectation of Future $Consumers expect the price to decrease in the futureConsumer expect the price to increase in the future
Tastes and PreferencesTastes and Preferencess turn against the productTaset and preferences turn in favor of the product
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Demand Vocabulary

Vocabulary WordDefinition
Demandrelates the quantity of a good that consumers would purchase at each of varius possibl prices, over some period of time, ceteris parabus
Quantity DemandedThe quantity that consumers would purchase at a given price.
Ceteris Parabusholding all things else constant
law of demandas price falls, the quantity demanded increases
Normal Goodsdemand for these goods varies directly with income.
Inferior Goodsdemand forthese goods varis inversely with income
Substitutessomething that takes the place of somehing else, suchas one brand of cola for another
Complementsgoods or services that go well with eachother, such as cream with coffee.
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