Supply and Demand Flashcards
The demand curve has
A negative slope due to the law of demand.
Law of Demand
-Based off the consumers willingness to pay less as marginal units are consumed
-That’s why the demand curve is downward
Substitutes
Two goods that can be used in the place of the other. If you can’t fly delta fly southwest.The rise in the price of one leads to a rightward shift in a demand curve for the other.
Movement along curve
Changes when price changes
Shift of curve
When other factors change
Demand:Tech,Income,tastes
Supply:Production costs or technology
Law of Supply
-Higher price will lead producers to supply a higher quantity to the market
-Supply curve shifts up because of this
Quantity Supplied
The amount of a good or service that producers are willing and able to sell at a specific price
-Shifts along the curve instead of
Quantity Demanded
The total amount of a good or service that consumers are willing and able to purchase at a given price.
Market Equilibrium
Where supply and demand meet on the graph. Stable market.
Surplus
When the supply of the good or service exceeds the demand. Price decreases when this happens
Shortage
When quantity demand of a good or service exceeds the quantity supplied. Price increases
Complements
Goods that go together. When the price of one good falls ppl buy more of the other good. Hot Dogs and Buns
