The principal that there is an inverse relationship between the price of a good and the quantity buyers are willing to purchase in a defined time period, ceteris paribus
Demand
A curve showing the varios quantities of a product consumers are willing to purchase at possible price during a specified period of time, ceteris paribus
Change in quantity demanded
A movement between points along a stationary demand curve, ceteris paribus
Change in demand
An increase or a decreased in the quantity demanded at each possible price. An increase/decrease in demand is a rightward/leftward shift in the entire demand curve.
Law of Supply
The principle that there is a direct relationship between the price of a good and the quantity sellers are willing to offer for sale in a defined time period, ceteris paribus
Supply
A curve showing the varios quantities of a product sellers are willing to produce and offer for sale in a defined time period, ceteris paribus
Change in quantity supplied
A movement between points along the curve, ceteris paribus
Change in Supply
An increase or a decreased in the quantity supplied at each possible price. An increase/decrease in supply is a rightward/leftward shift in the entire curve.
Market
Any arragment in which buyers and sellers interact to determine the price and quanity of goods and services exchanged
Surplus
A market condition existing at any price where the quantity supplied is > than the quantity demanded.
Shortage
A market condition exiting at any price where the quantity supplied is < than the quantity demanded
Equilibrium
A market condition that occurs at any price and quantity where the quantity demanded and the quantity supplied are equal.
Price system
A mechanisim that use the force of supply and demand to create an equilibrium through rising and falling prices.
Normal goods
Any good for which there is a direct relationship between changes in income and its demand curve.
Inferior goods
Any good for which there is an inverse relationship between changes in income and its demand curve