Lower Sixth Economics Notes –
Supply & Demand
1. Basic Concepts
●Supply: Quantity of a good/service
producers are willing and able to sell at
different prices over a period of time.
●Demand: Quantity of a good/service
consumers are willing and able to buy at
different prices over a period of time.
●Equilibrium: Point where quantity
demanded = quantity supplied.
2. Law of Demand
●As price ↑ → quantity demanded ↓
(ceteris paribus).
●Reasons: Higher prices reduce
, consumers’ willingness to buy.
●Graph: Downward sloping demand
curve.
3. Law of Supply
●As price ↑ → quantity supplied ↑
(ceteris paribus).
●Reasons: Higher prices incentivize
producers to supply more.
●Graph: Upward sloping supply curve.
4. Determinants of Demand
1•Income of consumers – higher
income → higher demand.
2•Price of related goods:
Supply & Demand
1. Basic Concepts
●Supply: Quantity of a good/service
producers are willing and able to sell at
different prices over a period of time.
●Demand: Quantity of a good/service
consumers are willing and able to buy at
different prices over a period of time.
●Equilibrium: Point where quantity
demanded = quantity supplied.
2. Law of Demand
●As price ↑ → quantity demanded ↓
(ceteris paribus).
●Reasons: Higher prices reduce
, consumers’ willingness to buy.
●Graph: Downward sloping demand
curve.
3. Law of Supply
●As price ↑ → quantity supplied ↑
(ceteris paribus).
●Reasons: Higher prices incentivize
producers to supply more.
●Graph: Upward sloping supply curve.
4. Determinants of Demand
1•Income of consumers – higher
income → higher demand.
2•Price of related goods:
