Unit 1: Economics and Globalization

Lesson 3a: Demand

Non-Price Determinants of Demand and Supply

 

Non-Price Determinants of Demand (PPINT)

Pe -- expected price
Pog -- price of other goods

1) substitute goods
2) complementary goods
3) independent goods

I -- income

1) normal goods
2) inferior goods

N -- number of POTENTIAL consumers
T -- tastes and preferences

Non-Price Determinants of Supply (PPPTTN)

Pe -- expected price
Pog -- price of other goods produced by same firm
Pres -- price of resources
T --technology
T --taxes and subsidies
N -- number of producers/sellers

 

NON-PRICE DETERMINANTS OF DEMAND

Pe -- expected price

Pe in the future D today
Pe in the future D today

Pog -- price of other goods

1) substitute goods
P Maxwell House coffee D Folgers coffee
P of one product D of its substitute

2) complementary goods
P of wieners D of buns
P of one product D of its compliment

I -- income

1) normal goods
Income D for normal goods
Income D for normal goods

2) inferior goods
Income D for inferior goods
Income D for inferior goods

Npot -- number of POTENTIAL consumers

Npot D
Npot D

T -- tastes and preferences

Tastes for a product D for that product
Tastes for a product D for that product

 

NON-PRICE DETERMINANTS OF SUPPLY

Pe -- expected price

Pe in the future S today
Pe in the future S today

Pog -- price of other goods also produced by the same firm

P soybeans S corn
P soybeans S corn

Pres -- price of resources

worker's wages cost of making cars S cars
Pres costs S
Pres costs S

Tech --technology

Improved technology costs S

Tax --taxes and subsidies

Taxes costs S
Taxes costs S

Subsidies costs S
Subsidies costs S

N -- number of producers/sellers

Nproducers S
Nproducers S

 

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Lesson 3a