Aqa topic 2

What is demand?

The quantity of a good/service consumers are willing and able to buy at a given price.

What is the law of demand?

As price falls, quantity demanded rises (inverse relationship).

What causes a movement along the demand curve?

A change in the price of the good itself.

What causes a shift in the demand curve?

Changes in income, tastes, population, price of substitutes/complements, expectations, etc.

What is supply?

The quantity of a good/service producers are willing and able to sell at a given price.

What is the law of supply?

As price rises, quantity supplied rises (positive relationship).

What causes a movement along the supply curve?

A change in the price of the good itself.

What causes a shift in the supply curve?

Changes in costs of production, technology, indirect taxes, subsidies, number of firms, weather, etc.

What is market equilibrium?

The price where quantity demanded equals quantity supplied.

What is excess demand?

Demand greater than supply → shortage → upward pressure on price.