Supply & Demand in Civics & Economics

Flashcards covering key concepts related to supply and demand in economics.

Price

The amount of money exchanged for a good or service.

Demand

The amount of a good or service that consumers are willing and able to buy at different prices during a given time period.

Law of Demand

Consumers will buy more of a good or service at lower prices and less at higher prices, indicating an inverse relationship between price and quantity demanded.

Supply

The amount of a good or service that producers are willing and able to offer for sale at each possible price during a given period of time.

Law of Supply

Producers will produce more when they can sell at a high price and will produce less when they can sell at a low price, indicating a direct relationship between price and quantity supplied.

Equilibrium Price

The point where demand equals supply, allowing everyone who wants to buy or sell at that price to do so.

Factors affecting demand

Price, income, consumer expectations, consumer preferences, price of supplementary goods, and availability of substitutes.

Factors affecting supply

Price, changes in the cost of resources, productivity, technology, changes in government policies, changes in taxes and subsidies, expectations of businesses, and changes in the number of suppliers.