Demand/Supply

Demand

• having the desire to own something and the ability to pay for it.

• the monetary cost exchanged for a good.

• how much of a product a producer is willing and able to sell at a certain price.

• a financial benefit from producing more of a good or service.

Law of Demand

• consumers respond to a product price change by buying more of a cheaper product.

• purchasing power is affected by price changes, leading to purchasing more of a cheaper product.

• consumers buy more of a good when its price decreases and less when its price increases

• a measure of how consumers react to a change in price.

Price

• having the desire to own something and the ability to pay for it.

• a financial benefit from producing more of a good or service.

• when quantity demanded exceeds the quantity supplied.

• the monetary cost exchanged for a good.

Quantity Demanded

• having the desire to own something and the ability to pay for it.

• the amount of product consumed at each price point.

• tracks the quantity demanded at each price point.

• a measure of the way suppliers react to a change in price.

Demand Curve =

• tracks the quantity demanded at each price point.

• the amount of output consumed in a market economy.

• urchasing power is affected by price changes, leading to purchasing more of a cheaper product.

• having the desire to own something and the ability to pay for it.

Substitution Effect

• purchasing power is affected by price changes, leading to purchasing more of a cheaper product.

• tracks the quantity demanded at each price point.

• the monetary cost exchanged for a good.

• consumers respond to a product price change by buying more of a cheaper product

Income Effect

• consumers buy more of a good when its price decreases and less when its price increases

• having the desire to own something and the ability to pay for it

• purchasing power is affected by price changes, leading to purchasing more of a cheaper product.

• consumers respond to a product price change by buying more of a cheaper product.

Law of Diminishing Marginal Utility

• tracks the quantity demanded at each price point

• occurs when any factor other than price causes the entire demand curve to move right or left

• as more of a product is consumed, its marginal benefit begins to decline

• purchasing power is affected by price changes, leading to purchasing more of a cheaper product.

Demand Shift

• occurs when any factor other than price causes the entire demand curve to move right or left

• consumers buy more of a good when its price decreases and less when its price increases

• a measure of how consumers react to a change in price

• tracks the quantity demanded at each price point.

Elasticity of Demand

• a measure of how consumers react to a change in price

• how much of a product a producer is willing and able to sell at a certain price

• the amount of output produced in a market economy

• consumers respond to a product price change by buying more of a cheaper product