Supply and Demand
The Law of Demand:
Definition:
A law in economics that states that consumers buy more of a good or service when its price goes down and less when its price goes up. If the supply of a good or service doesn’t change, when demand increases so does price and vice versa.
The Demand Curve:
The Law of Demand:
Definitions:
Supply - How much of a good or service is available.
The law of supply states that if demand stays the same when supply of a good or service increases its price drops and vice versa.
The Supply Curve:
Equilibrium, Price and Quantity:
Definitions:
Equilibrium price - The price of a product when demand equals supply.
It is important to find the point at which demand of a good or service equals supply.
Equilibrium Graph:
Change in Quantity Demanded:
Definitions:
When price goes up, demand goes down and vice versa.
Changes in quantity that consumers demand are always caused by a change in price.
Graph:
Change in Quantity Supplied:
Definitions:
According to the law of supply, when price goes up, supply goes down and vice versa.
Graph:
