DEMAND AND SUPPLY.docx

[DEMAND AND SUPPLY] Law of Demand - Gives the relationship between two specific variables: price and quantity demanded. Has an inversely relationship between each other. There are factors other than price that can influence the product demanded. A change in the price of the product will be indicat...

[DEMAND AND SUPPLY] Law of Demand - Gives the relationship between two specific variables: price and quantity demanded. Has an inversely relationship between each other. There are factors other than price that can influence the product demanded. A change in the price of the product will be indicated by a movement along the demand curve. Shift factors of demand (Other things held constant) -- External factors that can affect demands. Prices of related goods -- Look for substitutions, trying to maximize with limited amount of money. Comparable terms may be applied during buying. Substitutes are always in parallel direction. [Market Demand] Horizontal Summation of Demand from individual buyers.