Summary

Demand for goods and services is determined by price, tastes and fashions, income etc

The demand curve has a negative slope more is demanded at lower prices

Elasticity measures the responsiveness of one variable to a change in another PED looks at the responsiveness of quantity demanded to a change in price

If a product is elastic quantity demanded is more responsive to a change in price

The supply curve has a positive slope as price increases amount supplied also increases

Price elasticity of supply looks at the responsiveness of quantity supplied to a change in price Where the supply curve and demand curve interact is market equilibrium

Market equilibrium price changes if the demand or supply curves shift

The extent of the change in market equilibrium price is dependent on elasticity's

Demand and supply analysis can be used in many markets

There are Interrelationships between demand and supply in different markets this is due to composite demand, derived demand and joint demand Markets allocate resources to those that are able to pay at a certain price