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:red_flag:Microeconomics: Supply and Demand (The Demand Curve (Changes in…
:red_flag:Microeconomics: Supply and Demand
The Supply Curve
Supply Schedule
: a table showing how much of a good or service producers will want to sell at different prices
Demand Curve
: a graphical representation of the supply schedule, another way of showing the relationship between the quantity supplied and the price
Movements along the curve occurs when price changes and causes a change in the quantity supplied
Changes in supply
: shifts of the supply curve -- a change in the quantity supplied at any given price
Change in input prices
Change in the price of related goods
Change in technology
Change in expectations
Change in the number of producers
The Demand Curve
Demand Schedule
: a table showing how much of a good or service consumers will want to buy at different prices
Demand Curve
: a graphical representation of the demand schedule, another way of showing the relationship between the quantity demanded and the price
Law of Demand
: a higher price for a good, all other things being equal, leads people to demand a smaller quantity of that good
Movements along the curve occurs when price changes and causes a change in the quantity demanded
Changes in demand
: shifts of the demand curve -- a change int he quantity demanded at any given price
Change in the price of related goods
Change in income
Change in tastes
Change in expectations
Change in the number of consumers
Market Equilibrium
Competitive Market
: a market in which there are many buyers and sellers of the same good or service.
Equilibrium price
: the price at which the quantity demanded is equal to the quantity supplied
Surplus
: when the price is above its market-clearing level
Shortage: when the price is below its market-clearing level
Price Controls
Price Ceiling
: a maximum market price below the equilibrium price
Inefficient allocation to consumers
Wasted resources
Inefficiently low quanlity
Black markets
Unbinding vs binding
Price Floor
: a minimum market price above the equilibrium price
Inefficient allocation of sales among sellers
Wasted resources
Inefficiently high quality
Black markets
Minimum wage laws
