Demand and Supply Curves Flashcards
1
Q
Demand definition
A
Quantity of a good/service that a consumer is willing and able to buy at a given time and price.
2
Q
When price increases (Demand/supply)
A
Causes it to move up the demand/supply curve, a contraction in demand.
3
Q
When price decreases (Demand/supply)
A
Causes it to move down the demand/supply curve, an extension of demand.
4
Q
Assumptions of demand
A
Ceterus Paribus, where all other factors stay the same
5
Q
Factors affecting demand
A
- Price of the good/service
- Taste/fashion
- Substitues
- Complimentary goods
6
Q
Changes in price (Curve)
A
Movements along
7
Q
Changes in the others (Curve)
A
Lead to shifts
8
Q
Supply Definition
A
The quantity of a good/service that a supplier is willing and able to sell at a given time and price.
9
Q
Factors affecting supply
A
- Number of firms producing the good/service
- Subsidies
- Weather
- Cost of production
- Technology/Indirect tax
10
Q
Monatary value of tax and subsidy
A
Shown from the vertical distance between S1 and S2
