Law of Demand/Law of Supply

What two factors determine the equilibrium price?

• demand

• supply

• money

• people

According to the law of demand, what happens if there is an increase in price?

• quantity demanded increases

• quantity demanded decreases

• remains the same

• All of the above

A graph that plots out the demand schedule, which shows the relationship between price and quantity demanded

• demand

• demand schedule

• demand curve

• law of demand

• quantity demanded

The specific amount that buyers are willing to purchase at a given price; each point on a demand curve is associated with a specific quantity demanded.

• demand

• demand schedule

• demand curve

• law of demand

• quantity demanded

All of the quantities of a good or service that buyers would be willing and able to buy at all possible prices; demand is represented graphically as the entire demand curve.

• demand

• demand schedule

• demand curve

• law of demand

• quantity demanded

All other factors being equal, there is an inverse relationship between a good’s price and the quantity consumers demand; in other words, the law of demand is why the demand curve is downward sloping; when price goes down, people respond by buying a larger quantity.

• demand

• demand schedule

• demand curve

• law of demand

• quantity demanded

A table describing all of the quantities of a good or service; the demand schedule is the data on price and quantities demanded that can be used to create a demand curve.

• demand

• demand schedule

• demand curve

• law of demand

• quantity demanded

A movement along a demand curve caused by a change in price; a change in quantity demanded is a movement along the same curve.

• change in quantity demanded

• change in demand

• determinants of demand

• normal good

• inferior good

Changes in conditions that cause the demand curve to shift; the mnemonic TONIE can help you remember the changes that can shift demand (T-tastes, O-other goods, N-number of buyers, I-income, E-expectations)

• change in quantity demanded

• change in demand

• determinants of demand

• normal good

• inferior good

When buyers are willing to buy a different quantity at all possible prices, which is represented graphically by a shift of the entire demand curve; this occurs due to a change in one of the determinants of demand.

• change in quantity demanded

• change in demand

• determinants of demand

• normal good

• inferior good