Changes in quantity demanded

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Change in Quantity Demanded (▲QD) vs. Change in Demand (▲D)

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Presentation transcript:

Changes in quantity demanded Price changes of the commodity in question cause changes in quantity demanded that are usually opposite in direction. (-) The reasons for the price changes along the demand curve include: Shifts in market supply Unit taxes on price: p = p+t

MOVEMENTS ALONG THE DEMAND CURVE: Changes in quantity demanded Price A B Market Demand Quantity

Changes in Market Demand Changes in the number of consumers Income Changes (+) Changes in the prices of related goods: substitutes (+) or complements (-) Changes in preferences (+) Changes in consumer expectations (?) Changes in distribution of commodities (?) Ad-valorem taxes: sales taxes (-)

SHIFTS OF THE MARKET DEMAND CURVE: Changes in MARKET DEMAND Price A lower demand increase decrease B higher demand Quantity

Changes in quantity supplied Price changes of the commodity in question cause changes in quantity supplied that are usually in the same direction. (+) The reasons for the price changes along the supply curve include: Shifts in market demand

MOVEMENTS ALONG THE SUPPLY CURVE: Changes in quantity supplied Price Market Supply B A Quantity

Changes in Market Supply Changes in the number of producers or in competition terms Changes in technology of production Changes in company structure: Economies of scale and economies of scope. Changes in the cost of factors of production. Prices of substitutes and complements Expectations about future supply and demand Taxes and regulations

SHIFTS IN THE MARKET SUPPLY CURVE: Changes in MARKET SUPPLY Price A lower market supply B higher market supply increase decrease Quantity