Supply and Demand

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Demand - The quantity of a product that a buyer is willing to and able to purchase at a given price over a given period of time

Derived Demand - Demand for a factor of production or a good which derives not from the factor or good itself, but from what it produces

Joint (Complementary) Demand - Demand for goods which are interdependent, such that they are demanded together

Composite Demand - Demand for a good which has multiple uses

Competitive Demand - Demand for goods that are in competition with each other

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Supply is a fundamental economic concept that describes the total amount of a specific good or service that is available to consumers

What influences Supply?

  • Production Costs: Inverse relationship between supply and cost of production
  • Technology of Production: New technology = Increase in supply
  • Taxes and Subsidies: Taxes reduces supply
  • The price of related goods
  • Firms expectations about future prices

Competitive Supply - A situation in which a firm can use its factors of production to produce alternative products

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