External Influences - Demand and Supply Flashcards
1
Q
define demand
A
the amount of a good/service that consumers are willing and able to purchase at any given price
2
Q
define supply
A
the amount of a good/service that sellers are willing and able to sell at any given price
3
Q
what is the equilibrium
A
the price at which demand meets supply
4
Q
what happens on a supply and demand diagram when there is a change in price
A
you move along the graph
5
Q
what happens to the supply and demand diagram with a change in other factors than price
A
you shift either the supply curve or the demand curve or both
6
Q
name the 8 determents of demand
A
- price
- income
- wealth
- advertising
- demographic changes
- taste and fashion
- government action
- price of other products (complements and substitutes)
7
Q
what are the 5 supply factors
A
- price
- costs
- taxes
- subsidies
- price of other products
8
Q
what happens if supply exceeds demand
A
price lowers increase demand back to equilibrium
9
Q
what happens if demand exceeds supply
A
price rises to reduce demand back to equilibrium
