Chapter 4 Terms Flashcards
the amount of goods and services business firms are willing and able to provide at different prices
Supply
A law stating that the higher the price buyers are willing to pay, other things being held constant, the greater the quantity of the product a supplier will produce and vice versa
Law of supply
A tabular model noting the quantities of an item that suppliers are willing to produce at various prices
Supply schedule
A graph illustrating the quantities of an item that suppliers are willing to produce at various prices
Supply curve
A situation in which the change in the price of an item causes a change in the number supplied
Change in quantity supplied
the shifting of a supply curve that occurs when suppliers are willing to produce more or less of an item regardless of price
Change in supply
A leftward shift of the supply curve indicating a decrease in the quantity suppliers are willing to produce at any price
Decrease in supply
A rightward shift in the supply curve indicating a willingness of business firms to produce more of an item at any given price
Increase in supply
the price corresponding to the intersection of an item’s supply and demand curves; the price at which consumers are willing to buy the same quantity that suppliers are willing to produce
Market equilibrium price
the point at which the demand curve and the supply curve for an item intersect
Market equilibrium point
an excess of unsold products resulting from a price above the market equilibrium price
Surplus
A barrier preventing the price of an item from falling lower than a certain price
Price floor
A barrier preventing the price of an item from rising above a certain price
Price ceiling
an insufficient supply of an item as a result of a price below the market equilibrium price
Shortage
