Wednesday, February 27, 2008

A note- shift or move ?

Have you confuse about a change in d and s curves?. Here are a tips;
A.If demand changes and supply constant thus d curves shifts but s curves move. We say, change in demand and change in the quantity supplied.
B.If supply changes and demand constant thus s curves shifts but d curves move. We say, change in supply and change in the quantity demanded.

In case A, consumers' desire to buy changes but producer`s desire to sell not changes. Vise versa in case B.

Key to open the equilibrium door ; quantity supply, quantity demand, change in demand, change in supply, change in quantity supply, change in quantity demand, movements, shifts

Shifts in demand curve;
Shifts is about increase or decrease in demand curve.
Why ????
1. Income
2.Price of related goods
3.Tastes
4.Expectations
5.Number of buyers

Movement in demand curve
1. Price

Shifts in supply curve;
Why?????
1. Input prices
2.Technology
3.Expectations
4.Number of sellers

Movement in demand curve
1.Price

No comments: