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Prices are entirely dependant on supply and demand, the factors of each, price elasticity of demand
and the processes of production. Supply has a proportionate effect on price: as quantity rises, so
does the price of the good. Demand is exactly the opposite: as demand rises for a good, the…

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shown through an income elasticity of demand graph, showing the relationship between income and
inferior, necessary, normal and luxury goods. Supply is affected by the following: environmental
conditions; development costs, lower costs mean there can be more supplied for the same price,
shifting the supply curve to the right; technology,…

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zainab al

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The Price Mechanism moves market equilibrium resulting in new prices

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