Supply and Demand
AP Practice
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28 Terms
Demand
Relationship between the quantity demanded and the price
Supply
Relationship between the quantity supplied and the price
Price and Quantity
Where the demand and supply curves intersect
Markets
Goods, services, resources, inputs, money, virtual space
Quantity demanded
The amount willing and able to buy at a specified price
Law of Demand
Prices rises, the quantity demanded decreases, price falls, the quantity demanded increases
Demand schedule
A list of quantities demanded at various prices
Market demand
Sum of demands from all buyers in the market
Changes in demand
The movement of the demand curve due to changes in any factor other than price
Substitute (in demand)
A good consumed instead of another good
Complement (in demand)
A good consumed with another good
Normal good
Demand for the good increases as income increases
Inferior good
Demand for the good decreases as income increases
Change in quantity demanded
Changes in purchases due to price changes
Quantity supplied
The amount willing and able to supply at a specified price
Law of Supply
Price rises, the quantity supplied increases, price falls, the quantity supplied decreases
Supply schedule
A list of quantities supplied at different prices
Supply curve
A graph showing quantity supplied at various prices
Market supply
The sum of supplies from all sellers in the market
Changes in supply
The movement of the supply curve due to changes in any factor other than price
Substitute (in supply)
A good produced in place of another good
Complement (in supply)
A good produced along with another good
Change in quantity supplied
A change in quantity suppliers are willing to supply at different market prices
Market equilibrium
Where quantity demanded and quantity supplied meet
Equilibrium price
Quantity demanded equals quantity supplied (y-axis)
Equilibrium quantity
Quantity demanded equals quantity supplied (x-axis)
Surplus
Quantity supplied exceeds quantity demanded
Shortage
Quantity demanded exceeds quantity supplied