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Unformatted text preview: eases D decreases
3. Income Inferior Goods
As incomes go up the demand for normal goods decreases. As peoples incomes go down, demand for normal goods increases
^Y D decreases, Y decreases D^ Supply and Demand
4. Preferences 5. Prices of Related Products: Substitutes 6. Prices of Related Products: Complements
7. Expected future Prices by consumers
8. Expected future Income by consumers SUPPLY
Supply is the entire curve Quantity supply is just a point on the curve
Price changes Quantity Supplied
DOES NOT CHANGE SUPPLY
There are 5 determinants of Supply!
1. Number of suppliers
Suppliers are limited price will be high
Number of suppliers goes up, supply goes up causing cost of product to go down
as supply goes up cost goes down
3. Physical Availability of Resources PAR
4. Technology 5. Expected future prices by Suppliers
Tariff Tax raises cost...
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