Topic Three, Part 2 - Supply and Demand Flashcards
1
Q
What is Demand?
A
The amount of a product customers are prepared to buy
2
Q
What is Supply?
A
Amount of a product businesses are prepared to sell
3
Q
What is sold in the commodities market?
A
Everyday products
4
Q
What is sold in the goods market?
A
raw materials
5
Q
Difference between amount demanded and demand for the good itself?
A
A product is still demanded if the price goes up, but the amount their willing to buy may decrease
6
Q
What two ways can a business deal with changing market prices affecting costs?
A
- pass on to the consumer
- absorbed by the firm
7
Q
How do businesses set prices?
A
look at supply and demand
8
Q
What is equilibrium?
A
quantity demanded balances with quantity producers are willing to supply
9
Q
What are factors affecting demand?
A
- Income
- Trends
- Some goods are in joint demand
10
Q
What are factors affecting supply?
A
- Price
- Costs
- Taxes
