1.3 demand supply market equilibrium

Question 1

demand

Answer 1

Demand is the amount of a good that consumers are willing and able to buy at a given price.​

Question 2

supply

Answer 2

Supply is the amount of a product which suppliers will offer to the market at a given price.​

Question 3

Factors that cause a SHIFT in demand

Answer 3

Advertising​
Income​
Fashion and tastes​
Price of substitute goods​
Price of complimentary goods​
Demographic changes​

Question 4

Factors that may cause a shift in the supply curve​

Answer 4

Changes in the cost of production​
Changes in technology​
Indirect taxes​
Subsidies​
Natural factors

Question 5

market equilibrium

Answer 5

Where demand meets supply this is called the equilibrium price and gives equilibrium price and equilibrium quantity.

Question 6

excess demand

Answer 6

a situation where the market price is below the equilibrium price, thus creating a shortage in the market (it is not in the businesses interest to make the good / service)​
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Question 7

excess supply

Answer 7

a situation where the market price is above the equilibrium price, thus creating a surplus in the market (more businesses want to produce the good/service to profit)​