1. DEMAND
1.1. Definition
1.1.1. Refers to all possible quantities of goods and services that buyers are willing and able to buy at all possible prices
1.2. The demand curve
1.2.1. Demand describes how price influences buyer behavior
1.2.1.1. + If the price increase, the quantity a buyer will decrease + If the price decrease, the quantity a buyer will increase
1.2.2. Shift factors of demand
1.2.2.1. + Society’ income +Prices of other goods +Expectation +Tastes
2. SUPPLY
2.1. Definition
2.1.1. Refers to all possible quantities of a good that sellers are willing and able to sell at all prices
2.1.1.1. Definition: Supply describe how price influence seller: If price rises, the quantity supplied will increase. Ifprice decreases, the quantity supplied will decrease
2.2. The supply curve
2.2.1. Shift factors of supply are prices of inputs, technology, taxes and supplier’s expectation
2.2.2. An increase in the costs of producing a good would result in a decrease in supply so the supply curve shift to the left
2.2.3. Demand curve shows the price influence on buyers
2.2.3.1. + If higher income cause the buyers of a specific good to be willing and able to buy more at various prices, this event is expressed as an increase in demand and demand curve shifts to the right. +If buyer are willing and able to buy less at all of the various prices, there is a decrease in demand, and the demand curve shifts to the left.
2.2.4. Different between an increase in supply and an increase in quantity supplied: + An improvement in production technology would cause an increase in supply. + An increase in price results in an increase in quantity supplied
2.2.4.1. A market will be in equilibrium when there is no reason for the market price of the product to rise or to fall
2.2.4.1.1. Equilibrium ia a situation in which there is no tendency for change
2.2.5. A decrease in the costs of producing a good a good would result in an increase in supply so the supply curve shift to the right