Factors that will shift the demand curve left or “in”

1. Factors that will shift the demand curve left or “in” People buy lessat each price!! • Decrease in income • Price of substitute falls • Price of compliment increases • Poor product expectations • Expect price to fall

2. Shift the demand curve right or “out” are exactly the opposite! People will buy moreat each price!! • Increase in income • Price of substitute rises • Price of compliment decreases • Good product expectations • Expect the price to remain the same/increase

3. Factors that shift supply curves left or “in” • A decrease in producers • A decrease in technology • An increase in input cost • An increase in the price of a related output Factors that shift supply curves right or “out” • An increase in producers • An increase in technology • A decrease in input cost • A decrease in the price of a related output

4. Supply Curve shifter/mover: (SI=Shift in; SO=shift out; M=mover) ______ 1.) Ford installs new technology meant to lower production costs by 20%. ______ 2.) Federal government requires a metal connection instead of plastic for all child safety seats. ______ 3.) Old Navy increases all of its prices by 5%. ______ 4.) Computer chips for Dell computers drop in price. ______ 5.) Cost of shipping goes up for Mattel. SO SI M SO SI

5. Demand Curve shifter/mover: (SI=Shift in; SO=shift out; M=mover) ______ 1.) Ford lowers the price of their Escape. ______ 2.) “Frankenstorm” hits and threatens power outages which has what effect on the demand curve for batteries? ______ 3.) What will happen to the demand curve of Kindle Fire if Apple lowers the prices on their iPads? ______ 4.) Mattel lowers the prices of toys for the holiday shopping season. ______ 5.) There is a “health tax” imposed on all soda in NYC. What happens to the demand curve for Pepsi products in NYC? M SO SI M SI

6. Please put an “S” for substitute or a “C” for complement: _____ 1.) Wegman’s brand coffee and Folgers _____ 2.) Coke and Pepsi _____ 3.) Hammer and nails _____ 4.) Spaghetti and bread Demand curves are only dependent on what? __________________ ____________________ always goes on the x-axis and ____________________ always goes on the y-axis for supply and demand curves. S S C C PRICE QUANTITY PRICE

7. Gasoline 5.00 4.00 D2 S1 D1 3.00 S2 Price per gallon 2.00 1.00 0 50 100 150 200 250 300 Quantity in gallons

8. $4.65 What is the equilibrium price 1: ________ What is the equilibrium price 2: ________ What does equilibrium price really tell us? $4.60 Where the market is in balance for that product

9. ELASTIC Demand is considered ______________ when a change in price leads to a LARGE change in quantity demanded. Give three examples: ______________________________________________Now draw what this type of curve would look like: (remember to label your axis) IPODS, BOOKS, DVD’S P Q

10. INELASTIC Demand is considered ______________ when a change in price leads to a SMALL change in the quantity demanded. Give three examples: ______________________________________________Now draw what this type of curve would look like: (remember to label your axis) GAS, SALT, BABY FORMULA P Q

11. _______ Lower prices generally

12. _______ Companies engage in competitive pricing to