Shane's K.W.L (Demand & Supply)

What I know (W)

• Didn't know anything

What I want to know (W)

• What is the theory of demand?
• What is the law of demand?
• How does the demand curve work?
• Why is the demand curve downward sloping
• What affects demand?
• What is supply?
• What is a supply curve?
• What is the law of supply?
• Why is it upward sloping?
• What factors affect supply?
• What is market equilibrium?

What I learned (L)

• Demand or effective demand is the quantities of a good consumer are willing and able to buy at different prices over a specific time period.
• The law of demand is the inverse relationship between quantity demanded of a good or service and the price. During a certain time period. Ceteris paribus.
• The demand curve is downward sloping due to the substitute effect and the income effect. Substitute effect is when the price of a similar good price falls making its demand to go up. Income effect is when the price of a good falls, consumers are able to buy more thus higher quantity demanded.
• The demand curve illustrates different prices and quantity demanded at periods of time.
• The price of a good or service will affect its demand, the higher the price the lower the quantity demanded.
• Also non-price determinants affect quantity demanded of the good or service. PETPIGS is the acronym.
• Supply is the quantity of a good or service which sellers are willing and able to produce for consumers at different prices over a period of time. Ceteris paribus.
• The law of supply is that there is a positive relationship between price of which good or service is supplied and quantity supplied. Due to marginal cost producers are willing to produce more output if they are compensated, or firms allocate more resources to produce and sell goods of higher price to maximize profits.
• One factor that affects supply curve is price. Which affects the quantity supplied. As higher price leads to more quantity supplied.
• Next the non-price determinants of supply affect the quantity supplied. The acronym is WETPIGS
• Market equilibrium is the situation where there is no tendency to change. The point where consumers will not pay more than the equilibrium price and whereby producers will not sell less than the equilibrium  price to sell at.