Supply and Equilibrium (Video)

Vocabulary flashcards covering supply shifts, surplus, and equilibrium from the video notes.

Supply

The total amount of a good or service that producers are willing and able to offer for sale at various prices.

Supply Curve

A graphical representation of the relationship between price and quantity supplied.

Rightward shift (of the supply curve)

An increase in supply; the supply curve moves to the right, producing more quantity supplied at each price.

Increase in supply

An expansion of the quantity producers are willing to supply at every price; associated with a rightward shift of the supply curve.

Leftward shift (of the supply curve)

A decrease in supply; the supply curve moves to the left, producing less quantity supplied at each price.

Surplus

A situation where quantity supplied exceeds quantity demanded at a given price, causing price to fall toward equilibrium.

Equilibrium price

The price at which quantity supplied equals quantity demanded; the market-clearing price.

Equilibrium quantity

The quantity that corresponds to the equilibrium price where supply equals demand.

Quantity supplied

The amount of a good producers are willing to offer for sale at a given price.

Quantity demanded

The amount of a good consumers are willing to purchase at a given price.

Price

The monetary value of a good or service; moves opposite to supply when the supply curve shifts.

Effect of an increase in supply

Price falls and quantity increases; the market moves to a new equilibrium (lower price, higher quantity).