Supply and Demand Flashcards

Vocabulary flashcards for reviewing supply and demand principles.

Supply and Demand

Determine the price and quantity of goods in a market. Sellers and buyers set the price based on the product's availability and consumer demand.

Supply Curve

Shows the relationship between the price of a good or service and the quantity supplied, typically represented as an upward-sloping line.

Supply

Refers to the quantity of a good or service that the market can offer at a specific price, with higher prices generally leading to higher quantities supplied.

Non-Price Determinants of Supply

Costs of production, State of technology, Expectations of producers, Number of suppliers in the market, Government taxes and subsidies.

Cost of Production Effect on Supply

If production costs rise, supply decreases as it becomes less profitable to produce at the same price.

Technology Influence on Supply

Advancements in technology increase production efficiency, leading to greater supply at a lower cost.

Producer Expectations Importance

If producers expect higher future prices, they may reduce current supply to sell more later at a better price.

Government Taxes and Subsidies Role

Taxes increase production costs, reducing supply, while subsidies lower costs, increasing supply.