NOTES (1/12/15)- DEMAND AND SUPPLY 

• Demand: quantities that people are willing and able to buy at various prices
• The Law of Demand: an inverse relationship between price and quantity demanded
• Causes of "change in quantity demanded":
• caused only by a change in price
• Causes of "change in demand"
• a change in buyer's taste (advertising)
• a change in number of buyers (population)
• a change in income
• (1) normal goods: goods that buyers buy more of when their income rises
• (2) inferior goods: goods that buyers buy less of when their income rises
• a change in price of related goods
• (1) substitution goods: goods that serve roughly the same purpose to buyers
• (2) complimentary goods: goods that are often consumed together
• a change in expectations

Demand Curve:

• Supply: quantities that producers/sellers are willing and able to produce/sell at various prices
• The Law of Supply: direct relationship between price and quantity supplied
• Causes of "change in quantity supplied":
• change in price
• Causes of "change in supply":
• change in weather
• change in technology 
• change in cost of production
• change in taxes or subsidies
• change in number of sellers
• change in expectations

Supply Curve: