Answer this question:

• How do changes in each affect demand?
• What determine tastes?
• Demanders and Suppliers have different views of price. Demanders pay the price and suppliers receive it. Thus, a higher price is a bad news foe consumers but good news to producers. As the price rises , consumer reduce their quantity demanded along the demand curve and producers increase their quantity supplied along the supply curve. How is this conflict between producers and consumer resolved?
• what is differences between demanders and suppliers

INTERPRET THIS GRAPH

Changes in Consumer Income The Exhibit 1 shows the ___r__1_1aket demand D for pizza. This m: demand curve assumes a given level of money income. \"\"hihmhl Suppose consumer income increases. Some consumers will then be willing and able to buy more pizza at each price, so market demand increases. The demand curve shifts to the right from D to __D rexample, at a price of $12, the amount of pizza demanded increases from 14 million to zo million per 1-1! 5 indicated by the movement from point h to point f on demand cuwe D. in short, an increase in demand r- 15 that consumers are willing and able to t3u1,f more pizza at each price. The Supply Schedule and Supply Curve Exhibit 3 presents the market supply schedule and market supple curve 5 for pizza. Both show the quantities supplied per week at various possible prices by the thousands of pizza makers in the __ec ,As you can see, price and quantity supplied are __r positively, related. Producers offer more at a _h r price than at a lower price. so supply curve slopes upward. Th ere are two reasons why producers offer more for sale when the price rises. __Eir _,__a__s the price increases, other thing- _ producers becomes more willing to supply the goods. Prices acts as a signal existing and potential suppiier about the rewards for producing 1various good s. A higher pizza price attracts resources from lower-valued uses. A higher price makes producers more willing to increase quantity supplied. EXHIBIT 4 Change in Technology An Increase in the Supply of Pizza $15 Along a given suply curve, technology is assumed to remain 12 Price per pizza unchanged. If a better technology discover production costs will fall, so suppliers will be more willing to and able to supply the good at each price. Consequently, supply will increase as reflected by a rightward shiftof the supply curve. For example, 12 16 20 24 28 Millions of pizzas per week suppose a new high tech oven that costs the same as existing oven bakes pizza in half the time. Such a breakthrough would shift the market supply curve rightward as from S to S in Exhibit 4, where more supplied at each possible price.Change in Technology (cont) For example, at a price of $1z,the amount of supplied increases from 24 million to 28 million pizzas, as shown in Exhibit 4 by the movement from point g to point h. In short, an increase in supply-that is a rightward shift of the supplyr curvemeans that producers are willing and able to sell more pizza at each price. EXHIBIT 4 An Increase in the Supply of Pizza Changes in the Price of Relevant $15 - Relevant resources are those employed in the production of 12 Price per pizza good in question. For example, suppose the price of mozzarella cheese falls. This price decrease reduces the cost of making pizza,so producers are more willing and better able supply it. The supply curve for pizza shifts rightward,as shown in Exhibit 4. On 12 16 20 24 28 Millions of piccas per week the other hand, an increase in the price of a relevant resource reduces supply, meaning a shift of the supply curve leftward. For example, a higher price of mozzarella increases the cost in making pizaa. Higher production costs decrease supply as . . . ... . . reflected by leftward of the supply curve