Supply And Demand Flashcards
Demand
The willingness to buy a good or service and the ability to pay for it. (They movie in different directions)
Total Revenue
A company’s income from selling its products.
Demand Curve
Graphic that displays data from demand schedule.
Market demand curve displays data from the market demand schedule.
Supply Curve
Graphic that displays data from supply curve.
Market supply curve displays data from the market supply scheduled.
Demand Schedule
List of how much an item an individual is willing to purchase at every place.
Market schedule shows how much all customers are willing to purchase at each price.
Supply Schedule
Lists of how much of a good or service a producer is willing to offer at each price.
Market supply schedule lists how much all producers are willing to offer.
Law Of Supply
- price decreases, supply decreases
* price increases, supply increases
Law Of Demand
- price decreases, demand increases
* price increases, demand decreases
Price Floor
Legal minimum price for a good or service.
Price Ceiling
Legal maximum price for a good or service.
Substitutes
Products used in place of other products to satisfy needs or wants.
Compliments
Products used together.
Marginal cost
Extra cost of producing one more unit.
Marginal Product
Change in total output brought about by adding one more worker.
Fixed Costs
Costs that the owner incurs no matter how much they produce.
Variable Costs
Costs dependent upon the level of production output.
Surplus
Results when the quantity supplied is greater than the quantity demanded.
Usually indicates prices are too high.
Shortage
Results when the quantity demanded is greater than the quantity supplied.
Usually indicates prices are too low.
Equilibrium Price
The price at which the individual quantity demanded and individual quantity supplied are equal.
How is total revenue calculated?
By output quantity multiplied by total revenue.
What factors affect demand?
Willingness to pay. Ability to pay. Market size. Consumer taste. Consumer expectations.
What factors affect supply?
Input costs. Labor: Productivity. Technology. Government Action: Taxes, Regulation, etc... Producer Expectations. Number Of Producers.
Supply
The willingness and ability of producers to offer goods and services. (They move in the same direction)
