DETERMIN

ANTS O

F

SUPPLY

AND D

EMAND

DETERMINANTS OF SUPPLY AND DEMANDFactors that change the quantity demanded or supplied

DETERMINANTS OF DEMAND

1.Consumer preferences2. Market Size3. Income4. Price of related goods5. Consumer Security

CONSUMER PREFERENCES

Tastes changeWhat are some examples of tastes changing and therefore changing the amount of a product that is demanded?

MARKET SIZE

The amount of people to buy the product may change

What is a situation where this may occur?

INCOME

As the average income goes up or down, sales for products will also change

What is an example of this happening?

PRICES OF RELATED GOODS

Substitutes- products easily replaced with others

Complements- products purchased together

What are some substitutes and complements?

CONSUMER SECURITY

If you feel good or anxious about future- it will affect how you spend money

Give examples

DETERMINANTS OF SUPPLY1. Technological

improvement2. Resource prices3. Taxes and subsidies4. Competition

TECHNOLOGICAL IMPROVEMENTIf productivity can increase

RESOURCE PRICES

If prices of what goes into the product go up or down

Steel shortage?

TAXES AND SUBSIDIES

Subsidy- monetary grant to a business to help ease production or develop a new product

Taxes- add to production costs

COMPETITION

More producers enter the market