Ext. Definitions - Demand And Supply Flashcards
Define demand
The amount of a good/service that customers are willing and able to buy at any given price.
Define supply
The amount of a good/service that sellers are willing and able to sell at any given price
Define equilibrium price
The situation in a market where demand is equal to supply
Define elasticity of demand
Measures how sensitive quantity demanded is to a change in price
Define demographics
Characteristics of the human population
Define complement
A product that usually brought with another product
Define wealth
The value of total assets a person has
Define income
The monthly earnings coming in from employment
Define tax
An amount of money that is a paid to the government
Define subsidy
The government gives money to incentivise supply of certain products
Define substitute
An alternative product that serves the same service
Define excess supply/surplus
The quantity of goods that suppliers want to sell is high whereas quantity demanded is low - sale would get rid of products
Define excess demand/shortage
The price is very low which is attractive to customers and therefore creates excess demand - demand will push the price up and suppliers will want to supply more bringing it closer to equilibrium
Define market forces
The interaction of supply and demand
