Demand and Supply Model

These flashcards cover key terms and concepts related to the Demand and Supply model, focusing on definitions, laws, and factors affecting supply.

Supply

The relationship between price and quantity supplied of a particular good.

Quantity Supplied

The amount of a good that sellers are willing and able to sell.

Supply Schedule

A table that shows the quantity supplied at each price.

Supply Curve

A graph that illustrates how the quantity supplied of a good changes as its price varies.

Law of Supply

When the price of a good rises, the quantity supplied of the good increases and vice versa.

Factors that Shift Supply

Elements that can change the quantity supplied at every price, including number of sellers, input prices, prices of related goods, technology improvements, and expectations.

Input Prices

The costs associated with production factors, which when increased can lead to a decrease in supply.

Related Goods in Production

Goods that can be produced with the same resources, where an increase in the price of one can decrease the supply of another.

Complements in Production

Goods that must be produced together, where an increased price of one leads to an increase in supply for the other.

Technology Improvements

Advancements that can increase supply.

Future Expectations

Anticipations regarding future prices that can influence current supply.

Movement Along the Supply Curve

Changes in quantity supplied due to a change in the price of the good itself.

Shift in Supply Curve

Changes in supply caused by factors other than the price of the good.

Market Supply

The total quantity supplied by all sellers in a given market.

Perfectly Competitive Market

A market structure where numerous producers exist, and no single producer has control over the price.

Equilibrium Price

The price at which the quantity supplied equals the quantity demanded.

Demand Curve

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