Supply
Supply is the amount of product available
Factors that shift supply
- raw material cost
- environment
- technology
- # of suppliers
- ability to substitute/company change market
Demand
Demand is the need for the product
Factors that shift demand
- Complimentary goods
- substitute products
- population changes
- income changes
- future expected price
- consumer tastes
- season
Market
The market is the relation formed between the supply and demand. You always want to reach for equilibrium.
Market States
Shortage: Demand > Supply Surplus: Supply > Demand Equilibrium: Demand = Supply