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Economics > Demand, supply + equilibrium > Flashcards

Demand, supply + equilibrium Flashcards

1
Q

Demand

A

The amount of a good that consumers are willing able to buy at a certain price

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2
Q

Supply

A

The amount of a product which a supplier will offer to a market at a given price.

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3
Q

Market Equilibrium

A

The perfect balance between supply and demand creating an X on the graph.

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4
Q

Determents of demand (PASIFICE)

A

Population
Advertisement
Substitute
Income
Fashion trends (taste)
Interest rates
Complimentary goods
External shocks

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5
Q

Interest rate

A

The cost of borrowing and the reward for saving.

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6
Q

Factors of supply

A

Changes in cost of production
Changes in technology
Indirect taxes -VAT
Subsidies (money from government)
Natural factors (external shocks, weather etc)

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7
Q

Excess supply

A

A situation where the market price is above the equilibrium price.

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8
Q

Excess demand

A

A situation where the market is below the equilibrium price.

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9
Q

PED (formula)

A

% Change in quantity demand/ % change in price

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10
Q

Elasticity

A

Responsiveness in one variable to changes from another

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Economics (6 decks)

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