S&D Factors

There are many factors that can directly affect supply and demand and indirectly affect price and quantity. In the first column we identify a change in a given factor. Identify the impact of these factors.

Use I for increase, D for decrease, N for no change, U for uncertain.

 

       
Factor Demand Supply Equilibrium Price Equilibrium Quantity
         
1. Price of a substitute rises        
2. Price of a complement falls        
3. Income rises (normal goods)        
4. Income falls (inferior goods)        
5. Price of relevant resource rises        
6. Technology advances        
7. Quota        
8. Number of buyers rises        
9. Number of sellers rises        
10. Buyers expect higher price        
11. Sellers expect higher price        
12. Tax on production        
13. Preferences become more favorable         
     with respect to the good.