Demand & Supply
Demand Factors:
Price factor
Law of demand: The price has a negative relationship with demand (as in if one increases, the other decreases, and vice versa)
Non-price factors
Income:
Normal goods
Positive relationship with demand (they increase and decrease together)
Inferior goods
Negative relationship with demand
*Ex: less convenient goods
Price of Related Goods
Subsitute
Price of the subsitute goods has a positive relation with demand for the main goods
Ex: good: coffee —> subsitute: tea
Complement
Price of complement goods has a negative relation with demand for the main goods
Ex: good: cellphone —> complement: apps
Supply
Price Factory
Total Revenue = Price * Quantity
Price = Total Revenue / Quantity
Positive relation
