Demand and Supply Flashcards
Define demand
The amount of a good or service someone is willing or able to buy at any given price
Define supply
The amount of a good or service that sellers are willing or able to sell at any given price
Define equilibrium
The equilibrium is when supply meets demand, all parties are satisfied
What is meant by price
The amount of a good or service customers are willing and able to pay
What happens to supply when price increases?
Supply increases
What happens to demand when price increases?
Demand decreases
Define wealth
A measure of the value of all assets of worth owned by a person, community, country or company
What happens to demand if their is rising wealth in an area?
Demand increases
Define advertising, and promotional offers
An announcement in public relations which generates immediate sales, product interest, trial or purchase.
What happens to demand if a business uses adevertisments or promotional offers?
The demand will increase
Define tastes and fashion
The most popular items in a market
What happens to demand when tastes and fashions occur?
Demand increases
Define demographic changes
Describes the people who live in an area who will be potential stake holders
What happens to demand if the population increases?
Demand will increase because there are more potential stakeholders
Define substitutes
Goods that you can consume in place of another
What would be the effect in the demand curve if substitutes increased?
Demand would decrease, there are more available products on the market
Define what is meant by tax
A compulsory donation to the state revenue
What is the effect in the supply curve if taxes increase?
Supply will decrease
Define subsidies
A government grant given to a business who produce beneficial goods, to encourage the production of these goods
What is the effect on the supply curve if a business receives a subsidy?
Supply will increase because they will have more money to produce more products
Define what is meant by the price of other products
Competitive supply. Where a business who supplies one product which depreciates in price may start supplying another which is more profitable
What is meant by an excess of supply?
If the price is set too high, there’s an excess in supply
What is meant by an excess in demand?
Price is set below the equilibrium, not enough to cater to the demand for the product
