microeconomics revision

The law of demand

= Amount of goods willing to be purchased at a given price. (Price increase = demand decrease)

A shft in the demand curve is caused by the following factors (excluding price);

• substitutes
• income
• tastes
• expectations
• size of population

The law of supply

= willingness to supply at a particular price (Price increase = supply increase)

Shifts in the supply curve are caused by the following factors (exclu. price);

• change in number of firms
• change in productive tech

Market (dis)equilibrium; 

where QUANTITIY DEMANDED = QUANTITY SUPPLIED (simultaneous equations)

Dis equiliibrium = when charging a…