Eco w/ PFL Unit 2: Business Principles

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Supply

Back

The quantity of a good or service that producers are willing and able to offer for sale at different prices during a specific period.

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Demand

Back

The quantity of a good or service that consumers are willing and able to purchase at different prices during a specific period.

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Equilibrium Point

Back

The intersection of the supply and demand curves in a market where the quantity demanded equals the quantity supplied.

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Equilibrium Price

Back

The price at which the quantity demanded by consumers equals the quantity supplied by producers, resulting in a stable market price.

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Equilibrium Quantity

Back

The amount of a good or service bought and sold at the equilibrium price where supply and demand are in balance.

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Surplus

Back

Occurs when the quantity supplied of a good exceeds the quantity demanded at a given price, leading to excess supply in the market.

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Shortage

Back

Happens when the quantity demanded of a good exceeds the quantity supplied at a given price, resulting in an insufficient supply in the market.

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Non-Price Determinants

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Factors other than the price of a good that influence supply and demand, such as consumer preferences, income levels, technology, and government policies.

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Regulations

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Rules and laws established by the government that impact how businesses operate and can influence market behavior.

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Subsidies

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Financial assistance provided by the government to businesses or industries to support production, reduce costs, or encourage certain activities.