Supply/Demand Test

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20 Terms

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demand curve
a curve that shows the relationship between the price of a product and the quantity of the product demanded
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Supply Curve
A curve that shows the relationship between the price of a product and the quantity of the product supplied.
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Quantity Demanded
the amount of a good that buyers are willing and able to purchase
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Quantity Supplied
the amount of a good that sellers are willing and able to sell
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Change in Quantity Demanded
a movement along the demand curve that shows a change in the quantity of the product purchased in response to a change in price
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Change in Quantity Supplied
a movement along the supply curve that occurs in response to a change in price
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shortage
A situation in which quantity demanded is greater than quantity supplied
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surplus
A situation in which quantity supplied is greater than quantity demanded
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equilibrium price
the price at which the quantity demanded equals the quantity supplied
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equilibrium quantity
the quantity supplied and the quantity demanded at the equilibrium price
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input costs
the price of the resources needed to produce a good or service
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change in demand
a shift of the demand curve
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change in supply
a shift of the supply curve
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normal goods (superior goods)
direct relationship with income. If income goes up, demand goes up. If income falls, demand falls.
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inferior goods
Goods for which demand tends to fall when income rises and demand goes up when income falls.
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Complements
two goods for which an increase in the price of one leads to a decrease in the demand for the other
Ex. Hot dogs and Buns
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Substitutes
two goods for which an increase in the price of one leads to an increase in the demand for the other
Ex. Pepsi and Coke
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demand schedule
a table that shows the relationship between the price of a good and the quantity demanded
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supply schedule
a table that shows the relationship between the price of a good and the quantity supplied
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Equilibrium
the price at which demand equals supply/where the demand and supply curve intersect or cross.