Demand And Consumer Surlplus Flashcards
What is the equilibrium price?
Where demand equals supply
What is consumer surplus?
The extra amount that a consumer is willing to pay for a product above the price that is actually paid
What is producer surplus?
The difference between the price a producer receives and the minimum price they are willing to accept
Define Demand?
Demand is the quantity of a good or service that consumers are willing and able to purchase at a given market price over a specified period of time.
What are the 5 determinants of demand?
- The price of the goods or service
- The price of substitutes
- The price of compliments
- Consumer’s disposable income and wealth
- Tastes and preferences.
What does a demand curve show?
A demand curve shows the quantities of a good or service that consumers are willing and able to purchase at every price over a specified time period.
Changes in price… (song)
Changes in the price lead to movements along, Changes in the others lead to shifts, ceteris paribus
What is a shift in demand?
An increase or decrease in demand
What is a movement along of demand?
An extension or contraction of demand
Where is consumer surplus shown on the diagram?
The area below the demand curve and above the market price shows the consumer surplus
