supply and demand Flashcards
individual demand meaning (don’t deep it)
the demand for a good or a service by a single consumer at a particular cost and at a specific point in time
what is market demand
demand for a good and service from all consumers.
why does price and quantity have an inverse relationship
(draw the diagram don’t be lazy)
when price increase qd decreases and when price decreases quantity demanded increases
what is an extension on the demand curve
The situation in which the demand increases when there is a fall in price (other factors being constant)
when is there a contraction on the demand curve
the situation which the demand decreases when there is a increase in price (other factors being constant)
what is individual supply
the amount of a commodity that a certain company is willing and able to sell at a specific price during a specific period
what is market supply
total quantity of a good or service that all producers in a given market are willing and able to offer for sale at various price levels during a specific period
relationship between price and quantity (supply)
a higher price leads to a higher quantity supplied and a lower price leads to a lower quantity supplied
extension on the supply curve
When the price of a commodity increases its quantity supplied also increases
contraction on the supply curve
When a fall in the price of a commodity leads to decrease in quantity supplied of a commodity
what is consumer surplus
happens when the price consumers pay for a product or service is less than the price they’re willing to pay
effects of changes in price on consumer surplus
price increases- cs decreases
price decreases- cs increases
what is producer surplus
Producer surplus is the difference between the price a producer actually receives for a good or service and the minimum price they would be willing to accept to produce that good or service.
effect of change in price on producer surplus
price increases- ps increases (can now sell product at a higher price)
price decrease- ps decreases (have to sell at lower price decreasing surplus they can receive per unit)
factors affecting demand
income
adverts
population changes
fashion
interest rates
price of compliments
