23.10.19 Economics for management
Understanding markets
Shifts in the demand curve
o Every industry/market has a time, product and geographical dimension.
o This occurs due to:
- Uncontrollable factors: out of the firm’s control (Income, wealth, interest rates,
prices etc…)
- Controllable factors: controlled by the company (Price, advertising, product quality)
Demand increase:
Supply curves
o Supply curves: functions that relate the price of a product to the quantity supplied by
sellers
Slopes upwards
because: as price
increases, firms
are able to supply
more.
Only the most
efficient firms can
survive at lower
prices.
Understanding markets
Shifts in the demand curve
o Every industry/market has a time, product and geographical dimension.
o This occurs due to:
- Uncontrollable factors: out of the firm’s control (Income, wealth, interest rates,
prices etc…)
- Controllable factors: controlled by the company (Price, advertising, product quality)
Demand increase:
Supply curves
o Supply curves: functions that relate the price of a product to the quantity supplied by
sellers
Slopes upwards
because: as price
increases, firms
are able to supply
more.
Only the most
efficient firms can
survive at lower
prices.
