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Shortage
________- a situation in which quantity demanded is greater than quantity supplied.
Surplus
________- a situation in which quantity supplied is greater than quantity demanded.
Supply schedule
________- a table that shows the relationship between the price of a good and the quantity supplied.
supply demand model
The ________ is a tool that is used to understand the factors that influence the price and quantity of a good and why those prices and quantities change over time.
Law of supply
________ and demand- the claim that the price of any good adjusts to bring the quantity supplied and the quantity demanded for that good into balance.
A→B price decrease
________ leads to increase in quantity demanded.
B→ a price increase
________ leads to decreases in quantity demanded.
Supply
the quantity of a good and/or service that producers are willing and able to offer for sale at each possible price during a certain time period
Demand
the quantity of a good or service that buyers are willing to and able to buy at all possible prices during a certain time period
Law of demand
as the price of a good increases, the quantity demand of that good decreases
Normal good
demand increases when income increases
Inferior good
demand decreases when income increases
Substitute
two goods are substitutes, a decrease in the price of one leads to a decrease in demand for another
complements
two goods are complements a decrease in the price of one good leads to an increase in the demand for the other
Law of demand
as the price of a increases the quantity demanded of the that good decreases
The Demand Curve
The Relationship between Price and Quantity Demanded
Law of demand
the claim that, other things equal, the quantity demanded of a good falls when the price of the good rises
Demand schedule
a table that shows the relationship between the price of a good and the quantity demanded
Demand curve
a graph of the relationship between the price of a good and the quantity demanded
Market demand
the sum of all individual demands for a particular good or service
Increase in demand
any change that increases the quantity demanded at every price and shifts the demand curve to the right
Decrease in demand
any change that reduces the quantity demanded at every price and shifts the demand curve to the left
The Supply Curve
The Relationship between Price and Quantity Supplied
Quantity supplied
the amount of a good that sellers are willing and able to sell
Law of supply
the claim that other things equal, the quantity supplied of a good rise when the price of the good rises
Supply schedule
a table that shows the relationship between the price of a good and the quantity supplied
Supply curve
a graph of the relationship between the price of a good and the quantity supplied
Market supply
the sum of the supplies of all sellers
Equilibrium
a situation in which the market price has reached the level at which quantity supplied equals quantity demanded
Equilibrium price
the price that balances quantity supplied and quantity demanded
Equilibrium quantity
the quantity supplied and the quantity demanded at the equilibrium price
Surplus
a situation in which quantity supplied is greater than quantity demanded
Shortage
a situation in which quantity demanded is greater than quantity supplied
perfect complements that must be consumed in fixed proportions
If the sign of XED (cross point equilibrium) is negative ( -\infty−∞minus, infinity) and the elasticity of the goods are perfectly elastic
complementary goods
If the sign of XED (cross point equilibrium) is negative ( -\infty−∞minus, infinity) and the elasticity of the goods are elastic
substitutable goods
If the sign of XED (cross point equilibrium) is positive
Unrelated goods
If the result of XED(cross point equilibrium) is 0
Note 
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