Shifters of demand
1. Tastes and Preferences
2. Number of Consumers
3. Price of Related Goods
4. Income
5. Future Expectations
Impact of price on the supply/demand curve
the price changes as the supply changes
Calculating Elasticity
% change in quantity / % change in price
When is a graph Elastic/inelastic?
when the coefficient is 0 the graph is elastic otherwise it is inelastic
when is a good inferior/normal?
inferior is when it is a good that is not necessary but rather a luxury
When is a good Complementary/ substitute
complementary is when one goes up the other goes down. Substitute is when one good goes up the other good thrives
Consumer/ producer surplus
Consumer surplus is the difference between the price paid
for a good or service and the benefit/value of that product/service. Producer surplus is the profit
they make off of selling a product/good or offering a service
shifters of supply
1. A change in resource price
2. A change in technology
3. Changes in nature and politics
4. Changes in taxes