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Demand and Supply by Mind Map: Demand and Supply
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Demand and Supply

relations between products

Substitutes

Complements

Demand

Quantity demanded of X is the amount of a commodity that households wish to purchase

increase in P, decrease in D

increase in I, increase in D provided X is a normal good

Demand curve

Supply

The amount of a commodity that firms are able and willing to sell (Desired, not actual sale)

Sx = f (Px, Tech, W, r) Px = Price of commodity Te = state of technology < inversly related > W = Wages R = interest rates

Supply Curve

Determination of Prices

Equilibrum occurs when demand = supply

Elasticity of demand

Elasticity refers to the responsiveness of demand to changes in prices, income, prices.

income elasticity of demand % change in demand X = -------------------------- % change in income

Cross price elasticity of demand

Price Elasticity of demand