The Law of Demand
An increase in the price of a slice of pizza causes consumers to do this
Buy fewer slices of pizza
Gasoline has a low demand elasticity range (0.21 to 0.75), therefore it is:
Inelastic
A wildfire that puts a major lumber producer out of business causes a lumber supply curve to shift in this direction.
To the left
Market equilibrium is reached at the exact point where these two market forces are equal.
supply and demand
Both price ceilings and price floors create this overall unstable condition in a market.
disequilibrium
When studies reveal green tea improves focus, consumer preference sharply increases, causing this movement on the demand curve graph.
A shift to the right
When a 10% price increase at a Japanese restaurant caused the Larvine family to reduce their visits from weekly to monthly, their demand was described as this.
Elastic
Hiring a 5th worker increases total cake output from 52 to 58, whereas the 4th worker increased it from 40 to 52; the bakery is experiencing this economic phenomenon.
Diminishing marginal returns
Falling prices cause quantity demanded to rise and quantity supplied to fall until equilibrium is restored, usually triggered by this market condition.
a surplus
Setting a maximum legal price for apartment rentals well below the market equilibrium price results directly in this market condition.
Shortage
Economist David Henderson called this rule the "most famous law in economics," which explains that market responses to price changes are highly predictable.
the Law of Demand
When a package of LED light bulbs dropped from $50 to $40 and supply doubled from 100 to:
200
when revenue per hour is lower than operating cost per hour in a factory the owner should do tjis.
Shut down operations
Following a sudden shift in supply or demand, a free market economy will naturally experience this
a gradual restoration of equilibrium
An artificially enforced price floor that creates excess supply hurts both consumers and producers because producers must throw out excess stock and consumers pay this.
a higher price
A successful advertising campaign for a video game causes this specific graph movement for its demand curve.
Shift to the right
An item's elasticity is described as elastic when its calculated elasticity value is greater than this number.
1.0
When warfare cuts off rare metals and increases marginal costs above marginal revenue, the supply curve shifts in this direction.
To the left
A primary reason free market economies operate more efficiently than centrally planned economies is because they rely on these to allocate resources.
Prices
When a business advertises a product marked down with a clearance tag, it sends a signal to consumers that they are getting this.
a good price
This economic term describes why consumers buy Z-Ball brand golf balls instead of their usual brand due to a special sale.
The substitution effect
Theater ticket sales dropped by 60% after a 20% price hike; economists classify this demand as:
Elastic.
A new government financial payment given to rice farmers increasing the market supply of rice is an example of this.
A Subsidy
If a shoe manufacturer has 5,000 pairs of sneakers priced at $150 but consumers only buy 2,000 pairs, the firm must take this action to clear the surplus.
lower the price
When input costs rise and cause a supply curve to shift left, the new equilibrium point moves along the demand curve in these two directions relative to the original.
above(up) and to the left