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The Basic Law of Supply
Other things remaining equal, as the price of a good increases, the quantity supplied also increases
Supply Schedule
a list of numbers that compares price with quantity supplied
Supply Curve
a graphic representation of the quantity of goods supplied at different prices
Bartering
What are most of AKA Trading value accomplished through
Price
What affects quantity demanded
Down and to the right
How will the demand curve always move
Up and right
How will the Supply Curve move
Producer’s Goal
To find the price point where supply and demand are equal
Equilibrium
the point at which the quantity demanded and quantity supplied are equal
Shortage
the quantity demanded exceeds the quantity supplied
Surplus
the quantity supplied exceeds the quantity demanded
Elasticity of Demand
demand is elastic (doesn’t stay the same) because there are substitute goods available
Inelastic Demand
Consumers will pay very high prices for goods that have no substitutes available
Price Fixing
Government regulated prices for goods/services
Price Ceiling
max amount that a producer legally can charge for a good; if he is not making profit, he stops producing and a shortage results
Equilibrium
What is the invisible hand of the market
Supply or demand
The only time an equilibrium price will change if there is a change in what
Shortage
What does a Price Ceiling result in
Price floor
Price levels that the government sets above the equilibrium price
Producers will provide a large amount of goods, resulting in a surplus
Market Value
wage employers will pay and workers will accept in an open market
Worker Productivity
amount of goods and services a worker produces in a given amount of time
surplus
What does a Price floor result in
Note
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