economics note 3 - retardant that was called back because...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
1/16/08 “Increase in demand” vocab differences “Increase in quantity demanded” An “increase in demand” means the entire demand curve is shifting. “Increase in quantity demanded” means some point is moving along the demand curve. Supply The law of supply states, Ceteris Paribus, if the price of a good or service increases, the quantity supplied cannot decrease. In other words, the price of the item does not affect the output potential of the item. This is because the increase of the price of a good is an input value and will shift the entire supply curve. The four sources of shift in demand 1) Input prices are the total cost of making the product. If input prices go up, then the production line will shift to the left. “Strikes” are automatic shifts to the left. 2) Technology advances allow for greater output potentials. Therefore, if there is an increase in technology, the product line will shift right because more products are being produced. One of the most famous examples of this is asbestos; the flame
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: retardant that was called back because it was toxic. 3) Seller Expectations do not include seller tastes because they do not have to like the product they make to sell it. As long as there is money in the business and the people doing are good at what they do, they will continue doing it. An example would be a roller coaster creator that when asked which roller coaster was his favorite he responded, he did not like to ride them because they made him sick. 4) The number of sellers of a product is the number one most influential factor in supply. It is as simple as saying the more people who can physically sell the product, the more customers can potentially buy and “the market” for the specific product will expand. More sellers will cause the product line to shift right. * Difference between “increase in supply” and “increase in quantity supplied” is if the price changes or not....
View Full Document

This note was uploaded on 04/18/2008 for the course ECO 2023 taught by Professor O'gorman during the Spring '08 term at South Florida Community College.

Ask a homework question - tutors are online