Microeconomics: Supply and Demand

This set of flashcards covers essential vocabulary related to supply and demand in microeconomics.

Demand Shifters

Factors that cause the demand curve to shift to the left or right.

Normal Goods

Products whose demand increases as consumer income rises.

Inferior Goods

Products whose demand increases as consumer income falls.

Equilibrium Price

The price at which the quantity supplied equals the quantity demanded.

Supply Shifters

Factors that cause the supply curve to shift to the left or right.

Price Ceiling

A maximum price set by law that can be charged for a good or service.

Price Floor

A minimum price set by law that must be paid for a good or service.

Surplus

A situation where quantity supplied exceeds quantity demanded at a given price.

Shortage

A situation where quantity demanded exceeds quantity supplied at a given price.

Market Equilibrium

The point where supply and demand curves intersect, determining the market price and quantity.