lessaurn 2 supply and demand Flashcards
the value of a product or service. it helps in allocation goods and services among the members of the society
price
schedule of various quantities of commodities which buyers are willing and able to purchase at a given price, time, and place
demand
people buy more goods and services when their income increases. on the other hand, if their income decreases, demand for such goods and services also decline
income
more people means more demand for goods and services
population
demand for goods and services increases when people like or prefer them
taste and preferences
when people expect the prices of goods, especially basic commodities like rice, soap, cooking oil, or sugar to increase tomorrow or next week
price expectation
when the price of a certain product increases, people tend to buy a substitute product (competitor)
prices of related goods
consumers are most likely to buy more goods and services are price decreases, and buy less goods and services as price rises.
law of demand
at lower prices, an individual has greater purchasing power.
income effect
consumers tend to buy goods with lower prices.
substitution effect
is the schedule of various quantities of commodities which producers
are willing and able to produce and offer at a given price, place, and time.
supply
refers to the techniques or methods of production.
technology
in producing goods, raw materials are
needed, together with laborers
cost of production
more sellers or more factories mean an
increase in supply. Conversely, smaller number of sellers or factories means less supply.
number of sellers
changes in the price of goods affect the supply of such goods
price of other goods
