Non-Price
Determinants of
Supply and Demand
SSEMI2 The student will explain how the Law of Demand, the Law of Supply, prices, and profits work to determine production and distribution in a
market economy.
a. Define the Law of Supply and the Law of Demand.
b. Describe the role of buyers and sellers in determining market clearing price.
c. Illustrate on a graph how supply and demand determine equilibrium price and quantity.
d. Explain how prices serve as incentives in a market economy.
SSEMI3 The student will explain how markets, prices, and competition influence economic behavior.
a. Identify and illustrate on a graph factors that cause changes in market supply and demand.
Determinants of Demand
•
•
•
•
•
1. Consumer tastes and preferences
2. Market Size
3. Income
4. Prices of Related Goods
5. Consumer Expectations
Determinants of Demand
• 1. Shakira puts out a new album, the demand curve will shift
to the ___________
• 2. International trade opens a new market for selling CD’s, the
demand curve will shift to the __________
• 3. You lose your job and your income decreases, this causes
the demand curve to shift to the _________
• 4. Prices of Blue Ray discs increase, this will cause the demand
curve for DVDs to shift to the _______
• 5. You believe that tomorrow the price of gasoline will be
$0.50 a gallon, this will make the demand curve for gasoline
TODAY shift to the __________
Determinants of Supply
•
•
•
•
•
1. Input Costs of resources
2. Taxes, Subsidies, and Regulations
3. Competition
4. Producer Expectations
5. Technology
Determinants of Supply
• 1. The cost of cotton declines, the supply of t-shirts will shift
to the ______________
• 2. The government plans to lower taxes on imported steel, the
supply of cars will shift to the ______________.
• 3. After a number of years of successful competition between
4 cell phone companies, 2 of them begin to experience
declining sales and file for bankruptcy. The supply of cell
phones will shift to the ___________.
• 4. Producers of gasoline expect the price to Triple in the next 2
weeks, supply for CURRENT gasoline will shift to the
_________.
• 5. A new machine increases productivity of cars, supply will
shift to the _____________.