Demand and Quantity Demanded

            However, if the school allows a competing student the right to sell ice cream on school property, it could change the price of ice cream. The price of ice cream is lowered due to technology.  The invention of better ice cream machines or an idea to make better use of counter space can lower a firm’s cost and raise the quantity of ice cream it supplies.  Prices could also be increased due to input prices. Less ice cream is supplied when workers need be paid more, therefore ice cream machines cost more, or even ingredients like

When there’s an increase in the consumer’s income, there will be an increase in the demand for a good. If the consumer’s income falls then there will be a fall in

The first factor is the availability of substitute goods, which are goods that can be utilized instead of the original good. If there is a substitute good available, the demand is likely to change more because people can buy different products. On the contrary, if an item has few substitute goods, it may not gain or lose customers. In Canada, Nike shoes have lots of substitute goods like Adidas

2.) Which curve(s) change and based on the lists in the text of what causes demand and supply to shift what are the causes of theses shifts? D1 changed moving leftward indicating a decrease in demand due to a technological change: a technological setback causes a decrease. This causes price to go down as well as the demand is lower.

Rise in price will see a greater quantity supplied (quantity will rise), shift in supply curve. (McTaggart, 2010), (Layton, 2009).

price changes, whether they be increasing or decreasing, do not change demand ­ they change the

The price that other companies are charging for substitutes will also affect supply. If a substitute product has a low price, consumers are more likely to go with that product. Many times, companies are forced to lower their prices to compete with comparable products. The number of companies that enter the market changes the supply as well. More companies in the market mean more comparable products will be produced.

4. Assume that all the factors affecting demand in this model remain the same, but that the price has changed. Further assume that the price changes are 100, 200, 300, 400, 500, 600 dollars.

The demand curve shows what happens to the quantity demanded of a good when its price varies, holding constant all the other variables that influence buyers. When one or more of these other variables changes, the demand curve shifts leading to an increase or decrease in demand. The table below lists all the variables that influence how much consumers choose to buy cigarettes.4

When price changes, quantity supplied will change. That is a movement along the same supply curve. When factors other than price changes, supply curve will shift. Here are some determinants of the supply curve (Staff, 2017). Production cost: Since most private companies’ goal is profit maximization. Higher production cost will lower profit, thus hinder supply. Factors affecting production cost

A shift in the demand curve is in result of a change in the determinants of demands for an individual household. These determinants include: change in buyer’s taste, change in a number of buyers, change in income, change in the prices of related goods, and change in consumer’s expectations. However, those determinants will not affect the demand curve like change in quantity demanded will. The most important determinants in a quantity demand is an increase or decrease in price which will cause a shift along the demand curve. Consumers have to consider the marginal utility, or satisfaction they receive from consuming and extra beer.

One of the factors affecting the demand of a product is the price per unit of the product. A high price per unit of the product leads to a decrease in the demand of the product. Secondly, the price of other related products which include the complement and the substitutes also affects the demand of a product. (Backhouse, 2005) Thirdly, the buyers income is another factor which affects his decision to demand a good or a service. The more income the consumer has meant that his demand for a product is also high. However, mainstream economist argues that demand is affected by the price of the product alone. As the price of a product increase, the willingness of the consumers to buy the product decreases. (Sheehan, 2010) Basically, a high price of a product leads to a decrease in the demand of the product. As the price of the product continues to increase, the consumer may opt to switch to consumption of the other substituting product. As the price of the commodity decreases, the demand of the product increases because the product becomes more affordable and it gains a better value for the money than the substitute

Supply is the quantity of a product that producers want to sell at a specific price. The number one supply determinant for a company is the cost of production. The three other main determinants of supply are; improvements in technology, number of sellers, and the forecasted market expectations on future pricing. There are many other factors that may also lead to a change in supply; more favorable seasonal conditions, a fall in the cost of other goods resulting in less profit to produce them, and resources being shifted to the production of the good in question when it is more profitable.

If two goods are substitutes, we should expect to see consumers purchase more of one good when the price of its substitute increases. Similarly if the two goods are complements, we should see a price rise in one good cause the demand for both goods to fall

Unlike the demand relationship, however, the supply relationship is a factor of time. Time is important to supply because suppliers must, but cannot always, react quickly to a change in demand or price. So it is important to try and determine whether a price change that is caused by demand will be temporary or permanent.