Demand, Supply, and Market Equilibrium

Flashcards covering movements and shifts in demand, market equilibrium, and related concepts.

Movements in Demand

Occur when a change in quantity demanded is caused by a change in price.

Shifts in Demand

Occur when there is a change in an influencing factor other than the price.

Movements Along the Demand Curve

Caused by a change in price, either increasing or decreasing, causing movement to a new point on the existing demand curve.

Shifts in the Demand Curve

Caused by factors such as changes in income, consumer preferences, or external economic factors.

Leftward Shift in Demand Curve

Indicates a decrease in demand at every price level.

Rightward Shift in Demand Curve

Indicates an increase in demand at every price level.

Market Equilibrium

The point where the supply and demand curves intersect, meaning the quantity supplied equals the quantity demanded.

Equilibrium Price

The amount producers are willing to sell equals the amount consumers are willing to buy.

Price Changes and Demand

As price increases, the quantity demanded decreases; as price decreases, the quantity demanded increases.

Equilibrium Point

Represents a balance between supply and demand forces where the market is stable.