Studied by 2 people
What is demand?
Amount a customer is willing to pay at a set price
For demand: as price falls…
quantity demanded rises
For demand: as price rises…
quantity demanded falls
What is a substitute good?
Alternative that creates competition
What is a complimentary good?
Good that is bought alongside another
What is supply?
Amount of a product producers are willing to sell at any given price
For supply: as price falls…
quantity supplied decreases
For supply: as price rises…
quantity supplied increases
What else can influence supply?
Technological advancements
Legislation
Input costs
What is market equilibrium?
Quantity demanded equals quantity supplied
How do you solve the problem of excess demand?
Raise price to decrease demand
How do you solve the problem of excess supply?
Lower price
Note 
Flashcard (100)