Supply And Demand Flashcards
Markets
Markets enable exchange of goods/services by means of directly reciprocated (return in favor) transfers, voluntary entered into for mutual benefit, that is often impersonal
Competitive Market
• Many buyers & Sellers
• Same good / service
What does supply and demand model show
How competitive market works
5 key elements
- Demand Curve
- Supply Curve
- Demand & Supply Curve Shifts
- Market Equilibrium
- Changes in Market Equilibrium
Demand Schedule
How much good/service consumers will want to buy on different prices
Demand Curve
How much good/service consumers will buy at any given price
—-> graph of demand schedule
A shift of Demand Curve
Increase in Demand —> increase in population, etc —-> rise in quantity demanded at any given price
Decrease in Demand —-> decrease in quantity demanded at any given price
Movement along the demand curve
Change in price results change in quantity demanded
Substitutes
A fall in price of 1 makes consumers less willing to buy 2
Complements
Fall in price of makes consumers more willing to vuy the other
Normal Goods
Rise in income increases a demand for good
Inferior Goods
Rise in income decreases demand of the good
Market Demand Curve
Sum of all individual demand curves
Supply Schedule
Shows how much good/service would be supplied at different prices
Supply Curve
Shows graph of how much good/service people are willing to sell at any given price
Supply Curve Shift
Increase in Suppy Rise in quantity supplied at any given price
Decrease in Supply Decrease in quantity supplied at any given price
Movement along the Supply Curve
Is a change in the quantity supplied of a good l, that is result of a good in price
Market Suppy Curve
Sum of all individual supply curve
What causes
