Supply and Demand

Front

___________ is the quantity a consumer is willing and able to purchase at each price.

Back

demand

Front

The ____________ says that as the price of a good rises the quantity of the good consumers are willing and able to buy will decrease.

Back

law of demand

Front

__________ is the quantity a seller is willing and able to sell at each price.

Back

supply

Front

The ___________ says that as price rises the quantity a seller is willing and able to sell will increase.

Back

law of supply

Front

A market-clearing or _________________ is one where the quantity of a good that buyers are willing and able to buy matches the quantity of a good that producers are willing and able to sell.

Back

equilibrium price

Front

In a __________ economy, consumers decide what to produce, firms decide how to produce, and the price system decides who will get the items produced.

Back

market

Front

As the market/equilibrium price in the market changes, it sends __________ to buyers and sellers about how much they should be willing and able to buy and sell.

Back

signals

Front

If the price is set too high in a market (above the equilibrium price), there will be a larger quantity supplied than there is a quantity demanded, resulting in a ________.

Back

Surplus

Front

If the market is left alone and given time, the ___________ will see the surplus as a signal that the price is too high, and that they have produced too much.

Back

producers

Front

__________ will lower the price (put it on sale) to sell the excess inventory, and reduce the amount that they produce.

Back

Producers