LESSON 6 THE MARKET NEVER STANDS STILL

6-1

HIGH SCHOOL ECONOMICS 3RD EDITION © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY

Determinants of Demand

• Change in consumer income

• Change in tastes and preferences

• Change in the price of a substitute good

• Change in the price of a complementary

good

• Change in consumers’ price expectations

• Change in number of consumers in the

market

LESSON 6 THE MARKET NEVER STANDS STILL

6-2

HIGH SCHOOL ECONOMICS 3RD EDITION © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY

Shifts in Demand D

em

an

d

pri

ce

Quantity of pecans per day

10 20 30 40 50 60 70 800.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

D1

A B

C D

E F

D2

LESSON 6 THE MARKET NEVER STANDS STILL

6-3

HIGH SCHOOL ECONOMICS 3RD EDITION © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY

Determinants of Supply

• Change in the cost of productive

resources

• Change in technology

• Change in profit opportunities of

producing other products

• Change in producers’ price expectations

• Change in number of sellers in the

market

• Change in the government tax or

subsidy

LESSON 6 THE MARKET NEVER STANDS STILL

6-4

HIGH SCHOOL ECONOMICS 3RD EDITION © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY

Shifts in SupplyS

up

ply

p

rice

Quantity of pecans per day

10 20 30 40 50 60 70 800.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

S1 S2

A

B

C

DE

F