Supply And Demand Flashcards
1
Q
Demand definition
A
The quantity that customers are willing and able to pay at a given price in a given period of time
2
Q
Factors affecting demand
A
- price
- incomes
- preferences
- advertising
- demographic change
- external shocks
- seasonal factors
3
Q
Basic law of demand
A
Demand varies inversely with price:
Lower prices, higher demand
4
Q
Supply definition
A
The quantity of a good/service that a producer is willing and able to supply onto the market at a given price in a given time period
5
Q
Factors affecting supply
A
- cost of production
- external shocks
- technological change
- subsidies
6
Q
Basic law of supply
A
Higher prices, higher quantity supplied
7
Q
Equilibrium
A
State of equality between demand and supply
8
Q
Disequilibrium
A
When demand and supply are out of balance
