Demand
A curve or schedule showing the various quantities of product consumers are willing to purchase at possible prices during a specified period of time, ceteris paribus
Supply
A curve of schedule showing the various quantities of a product sellers are willing to produce and offer for sale at possible prices during a specified period of time, ceteris paribus.
Law of Demand
The principle that there is an inverse relationship between the price of a good and the quantity buyers are willing to purchase in a defined time period, ceteris paribus.
Quantity Demanded
Movement from point to point along the demand curve cause ONLY by a change in price.
Demand Curve
DOWNWARD SLOPING LINE that shows quantity demanded at different prices on a graph
A change in quantity demanded
Movement from point to point along the demand curve caused ONLY by a change in price
A shift in demand
The demand curve shifts moving the whole line to a different spot on the graph(left or right) when some big change happens.
Demand curve shifts to the RIGHT
Increase in demand
Demand curve shifts to the LEFT (caused by NON-price factors)
Decrease in demand
Causes of Shifts in Demand
market size, income changes, consumer tastes, substitutes, complementary goods, consumer expectations of a future price change NOT a change in price
Law of Supply
The principle that there is a direct relationship between the price of a good and the quantity sellers are willing to offer for sale in a defined time period, ceteris paribus.
Quantity Supplied
The amount of a good or service that a producer is willing and able to supply at a specific price
Supply Curve
UPWARD sloping line that shows on a graph the quantities supplied at each possible price
A shift in supply
The supply curve shifts moving the whole line to a different spot (left or right) on the graph when some big change happens
Determinants of supply
Resource costs, Number of sellers, technology, taxes and subsidies, producer expectations of a future price change
Equilibrium Price
The price at which the quantity demanded and quantity supplied are equal.
Surplus
Too much of a product at a price, occurs when the price is set too high
Normal good
When income increases, the demand for these types of items also increases.
Inferior good
When income increases, the demand for these types of items decreases.
demand
A curve or schedule showing the various quantities of product consumers are willing to purchase at possible prices during a specified period of time, ceteris paribus.
change in quantity demanded
A movement between points along a stationary demand curve, ceteris paribus.
change in demand
An increase or a decrease in the quantity demanded at each possible price. An increase in demand is a rightward shift in the entire demand curve. A decrease in demand is a leftward shift in the entire demand curve.
normal good
Any good for which there is a direct relationship between changes in income and its demand curve.
inferior good
Any good for which there is an inverse relationship between changes in income and its demand curve.
substitute good
A good that competes with another good for consumer purchase. as a result, there is a direct relationship between a price change for one good and the demand for its "competitor" good.
complementary good
A good that is jointly consumed with another good. As a result, there is an inverse relationship between a price change for one good and the demand for its "go together" good.
change in quantity supplied
A movement from point to point ALONG the a stationary supply curve and can be cause ONLY by a change in price.
change in supply
An increase or a decrease in the quantity supplied at each possible price. (not caused by price)
market
Any arrangement in which buyers and sellers interact to determine the price and quantity of goods and services exchanged.
equilibrium
A market condition that occurs at any price and quantity at which the quantity demanded and the quantity supplied are equal.
demand curve
A curve that shows the quantities of a good or service that people are willing and able to buy at different prices
What two things does the demand curve represent?
Relationship between PRICE and QUANTITY DEMANDED
demand curve? Direct or inverse Relationship
Inverse relationship between price and quantity demanded (one goes down the other goes up?
supply curve? Direct or inverse Relationship
Direct relationship between price and quantity supplied (one goes up the other goes up)
Demand schedule
A schedule showing the various quantities of product consumers are willing to purchase at possible prices during a specified period of time, ceteris paribus
What two things does the supply curve represent?
Relationship between PRICE and QUANTITY SUPPLIED