Supply and Demand

What is the Supply Curve?

• The supply curve is a relationship between each possible price of the good and the quantity that would be supplied for market sale at that price.

Factors that can affect Supply

• Available resources
• Price
• Competition
• Demand
• Economic factors
• Inflation

What is Effective Demand?

Quantity of a good or service that consumers are actually buying at the current market price.


What is Margin of safety? and How is it Calculated?

• The amount by which a firm's current level of output exceeds the level of output necessary to break even.  
• Margin of safety can be calculated by number of sales - BEP