Microeconomics Review: Market Structures, Business Types, Supply and Demand

A complete set of vocabulary flashcards covering fundamental microeconomics concepts, including business organizations, market structures, price controls, and supply and demand principles.

Price Floors

Government sets a minimum price.

Price Ceilings

Government sets a maximum price.

Sole Proprietorships

A business owned and operated by one person.

Partnerships

A business owned by two people.

Corporations

A business separated from its owners.

Monopoly

A product market dominated by 1 firm.

Oligopoly

A product market dominated by a few firms.

Monopolistic Competition

A market structure with many different but similar products.

Pure Competition

A product market structure with many buyers and sellers of the same product.

Demand

The quantity a consumer is able to purchase.

Supply

The quantity a seller is able to sell.

Law of Demand

As the price of a good increases, demand decreases.

Quantity Demanded

The amount of goods, services, or resources requested.

Law of Supply

As the price rises, the seller increases supply.

Quantity Supplied

The amount of a resource sellers are willing to sell.

Equilibrium Price

The price point where $\text{supply} = \text{demand}$.

Price Set Too High

Occurs when price is above equilibrium, resulting in a larger quantity supplied than demanded.

Price Set Too Low

Occurs when price is below equilibrium, resulting in large demand and a shortage.

Determinants of Demand

Types of market changes that cause the demand curve to shift left or right.

6 Determinants of Demand (INSECT)

Income changes (I), Number of consumers (N), Price of Substitute goods (S), Consumer Expectations (E), Price of Complementary goods (C), and Taste changes (T).

Determinants of Supply

Types of changes that cause the supply curve to move left or right.

6 Determinants of Supply (ROTTEN)

Resource costs (R), Other goods' prices (O), Taxes & subsidies (T), Technology (T), Expectations (E), and Number of sellers (N).