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Lecture 7

ECON 101 Lecture Notes - Lecture 7: Production Function, Excess Supply, Demand CurvePremium

Course Code
ECON 101
Marina Adshade

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ECON 101 - Lecture #7 - Demand and Supply
How do Different Factors Change Demand?
What happens when:
1) Price of complement rises - demand decreases
2) Income falls, and the good is inferior - demand increases
3) Population grow - demand increases
4) Price of good increases - movement up the curve (decrease in quantity demanded)
5) Future income expected to decrease, the good is normal - demand decreases
6) Price of good expected to increase in the future - demand increases
Supply Schedule and Supply Curves
Quantity supplied is the amount producers are willing to offer for sale during a specific
period of time
Factors that influence quantity supplied are:
The good’s price
The price of inputs
○ Technology
Expectations about the future
The number of firms in the industry
The weather
Distinguish supply schedule from supply curve
Supply schedule, like demand schedule, is a table presenting amount of supplies
offered at different prices
Supply curve is the graphical representation of supply schedule
Figure 1. Supply schedule and curve.
Change in quantity supplied refers to movement along the curve
Change in supply refers to shift in the entire supply function
How do the Changes in Different Factors Affect Supply?
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