Demand And Supply Flashcards
What does the supply curve show?
How much of a product producers would supply onto the market at different prices
( a change in price means you move ALONG the curve )
Factors that shift the demand curve?
Population changes Price of other goods Income Quality Fashion Advertising
Where is the equilibrium found?
Where the supply and demand curve meet
When the price reduces, supply goes down and demand up there will be what?
Excess demand
When price increases, supply goes up and demand down there will be?
Excess supply
What is price elasticity of demand?
The responsiveness of demand to a change in price
Measures how much demand actually changes as price changes
How to calculate elasticity of demand?
Percentage change in quantity demanded ➗ percentage change in price
Where quantity demanded is less than price
The product is?
Inelastic
Eg. Fuel, alcohol, cigarettes
When quantity demanded is more than price
The product is?
Elastic
What does the demand curve show?
The amount of product that consumers would buy at different prices
