Chapter 6: Markets - When Supply Met Demand

These flashcards cover key concepts related to markets, supply, demand, and equilibrium as discussed in Chapter 6.

Demand

The quantity of goods or services that will be bought at any given price over a period of time.

Demand Curve

A graph of the relationship between the price of a good and the quantity demanded.

Supply

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

Supply Curve

A graph of the relationship between the price of a good and the quantity supplied.

Equilibrium

A situation in which the price has reached the level where quantity supplied equals quantity demanded.

Equilibrium Price (P_E)

The price that balances quantity supplied and quantity demanded.

Equilibrium Quantity (Q_E)

The quantity supplied and quantity demanded at the equilibrium price.

Surplus

The situation that results when the quantity supplied of a product exceeds the quantity demanded.

Excess Demand

The situation that results when the quantity demanded for a product exceeds the quantity supplied.

Law of Supply and Demand

The claim that the prices of any good adjusts to bring quantity supplied and quantity demanded for that good into balance.

Shifts in Demand

Changes in demand due to non-price factors that can cause the demand curve to shift.

Shifts in Supply

Changes in supply due to non-price factors that can cause the supply curve to shift.

Increase in Demand

A shift in the demand curve to the right, indicating a higher quantity demanded at every price.

Decrease in Demand

A shift in the demand curve to the left, indicating a lower quantity demanded at every price.

Increase in Supply

A shift in the supply curve to the right, indicating a higher quantity supplied at every price.

Decrease in Supply

A shift in the supply curve to the left, indicating a lower quantity supplied at every price.