econ supply and demand

supply

the relationship between the price of a good and how much of that good sellers bring to the market

demand

the relationship between the price of a good and how of that good buyers are willing to purchase

aggregate

a whole formed by combining several different elements.

aggregate supply

the total supply of goods and services produced within an economy over a given period of time for a given price

aggregate demand

the total amount of money spent on goods and services at a specific price level during a a period of time.

equilibrium price

the point where the current market price for a good ensures that the quantity of goods supplied is equal to the number of goods demanded.

are prices for goods and services elastic or inelastic?

Goods and services are elastic when demand changes for them in the economy. They become inelastic when demand remains relatively constant, even when the economy shows signs of change

supply and demand has an important relationship to the economy because

they determine the prices and quantities available within a market

Does supply and demand contribute to a good or service having elastic pricing

Yes, as the relationship between the quantity supplied and demanded in response to price changes determines the elasticity of that product.

inelastic demand

when a price for a good goes up, consumers buying habits stay about the same. This is also true when the price goes down.

example of inelastic

prescription medications, water, gas

elasticity

the percentage of change of one economic variable in response to a percentage change in another

elasticity example

luxury items, soda, clothing

federal gov’t stimulus packages

more money in circulation which leads to more inflation and higher prices

what year contributing to current inflation in the USA

2022/2023

equilibrium price

illustrates how buyers and sellers determine prices. The price of the quantity demanded is equal to the quantity supplied.

seller

will produce more of something at a higher price due to increased demand and the motive to profit

buyers

will buy more products at a lower price due to the fact they can save money

supply/ supply curve

How much are sellers willing to supply at different prices? When ___ increases the___ curve shifts to the right. The greater the __ of a product, the lower the price to go due to its abundance

demand/ demand curve

How much of a product will people want at different prices? If __ demand increases, the __ shifts to the right. In most cases, this causes prices to go up due to both an increase in demand and the scarcity of that product, such as gasoline or super bowl tickets.

what impact consumption within an economy

cost of living, war, weather, etc.

supply and demand impacts on the economy

The possibility of business expansion, amount of marketing needed, hours offered impact wages earned, and inventories of products and goods, etc.