Demand is: quantity that people are willing and able to buy at various prices.
The Law of Demand: There is an inverse relationship between price and quantity demand.
What causes a "changes in quantity demanded?" - change in price

What causes a "change in demand?" 
-  change (Δ) in buyer's taste (advertising)
-change (Δ) in number of buyers (population)
-change (Δ) in income
   -Normal Goods: goods that buyers buy more when income rises
   -Inferior Goods: goods that buyers buy less when income rises
-change (Δ) in the price of related goods 
   -substitute goods - goods serving same purpose
   -complimentary goods - goods served together
-change (Δ) in expectations

Elasticity of Demand- tells how drastically a buyer will buy
Elastic Demand- (greater than 1) when you have a product that is elastic when demand will change in product because of price
Inelastic Demand-  (less than 1) demand will not change regardless (ex. Medicine, Gas, Milk)
Unit Elastic- 1 

Finding % Change in Quantity 

1.) New Quantity - Old Quantity 

                   _______________________   X 100

           Old Quantity 

 Finding % Change in Price

2.) New Price - Old Price

                           _____________________    X 100

          Old Price

3.)PED =  
% change in Q.D    
                   _______________________                   

                                                                % change in Price

Supply: is quantities that producers and sellers are willing and able to produce and sell at various prices.

The Law of Supply: There is a direct relationship between price and quantity supply

What causes a "change in quantity supplied?"  - change in price

What causes a "change in supply?" 

-change (Δ) in technology

-change (Δ) in taxes or subsidize

-change (Δ) in # of sellers

-change (Δ) in resource prices/cost of production

-change (Δ) in weather

-change (Δ) in expectations

Equilibrium = It is the point where the supply and demand meet 

Shortage = QD > QS = excess demand 

Surplus = QS > QD = excess supply

Supply Formulas 

TFC (Total Fixed Cost): cost that does not change no matter how much it is produced

MC  (Marginal Revenue): additional income from 1 more unit of a good

TVC (Totale Variable Cost): cost that does change depending on how much it is produced

TC = TFC + TVC 

MC = New TC - Old TC

AFC = TFC/Q

AVC = TVC/Q

ATC = AFC + AVC or TC/Q