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