... the price of this good leads to a rise in the quantity supplied shown by a movement along the supply curve. The change in supply can be caused by a change in production costs, technology and the price of other goods. At a lower price some firms will cut back on relatively unprofitable production whereas others will stop production altogether. The demand for a good will rise or fall if there are changes in factors such as incomes, the price of other goods, tastes, and the size of production. The demand curve shows effective demand, this means it shows how much would be bought by customers at any given price and not how much buyers would like to buy if they had unlimited resources. Equilibrium is the point where the demand and supply curves cross. This is the central point where expectations are being realised. The reasons behind the ...

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