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Market equilibrium
The point where demand equals supply in a free market, leading to stable prices.
Excess demand
Situation where demand surpasses supply, causing prices to rise.
Excess supply
Situation where supply exceeds demand, leading to price decreases.
Consumer surplus
Variation between what consumers are willing to pay and what they actually pay for a product or service.
Producer surplus
Difference between the price producers are willing to sell for and the price they receive.
Joint demand
Relationship where the demand for one good affects the demand for another complementary good.
Competitive demand
Situation where goods are substitutes, and a change in demand for one affects the other.
Derived demand
When the demand for one good influences the demand for its input, like cars and aluminum.
Composite demand
When two goods require the same input, leading to a trade-off in production.
Joint supply
Relationship where the production increase of one good leads to an increase in the supply of another.
Price elasticity of demand (PED)
Measures the responsiveness of quantity demanded to price changes, determining elasticity levels.
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