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19 Cards in this Set
- Front
- Back
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Competitive Market
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a market in which there are many buyers and sellers of the same good or service, none of whom can influence the price at which the good or service is sold
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Supply and Demand model
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a model of how a competitive market behaves
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Demand Schedule
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Shows how much of a good or service consumers will want to buy at different prices
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Quantity Demanded
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the actual amount of a good or service consumers are willing to buy at some specific price
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Demand Curve
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A graphical representation of the demand schedule. It shows the relationship between quantity demanded and price
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Law of Demand
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A higher price for a good or service, other things equal, leads people to demand a smaller quantity of that good or service
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Shift of the Demand Curve
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A change in the quantity demanded at any given price, represented by the change of the original demand curve to a new position, denoted by a new demand curve
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Movement along the demand curve
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A change in the quantity demanded of a good arising from a change in the goods price
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Five Principle factors that shift the demand curve for a good or service
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Changes in the prices of related goods or services
Change in income Change in tastes Change in expectations Changes in the number of consumers |
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Substitutes
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A rise in the price of one of the good leads to an increase in the demand for the other good
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Complements
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A rise in the price of one good leads to a decrease in the demand for the other good
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Quantity Supplied
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the actual amount of a good or service people are willing to sell at some specific price.
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Supply Schedule
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How much of a good or service would be supplied at different prices
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Supply Curve
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The relationship between quantity supplied and price
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Input
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a good or service that is used to produce another good or service
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Equilibrium
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When price has moved to a level at which the quantity of a good or service demanded equals the quantity of that good or service supplied
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Equilibrium Quantity
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The quantity of the good or service bought and sold at that price
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Surplus
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Of a good or service when the quantity supplied exceeds the quantity demanded. Surpluses occur when the price is above its equilibrium level
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Shortage
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When the quantity demanded exceeds the quantity supplied. Shortages occur when the price is below its equilibrium level
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