Fundamentals of Demand
the desire and the ability to own something
What is DEMAND?
Latin phrase for "all other things held constant"
What is CETERIS PARIBUS?
As price goes up, the quantity supplied goes up and vice versa
What is the LAW OF SUPPLY?
A rise in input costs will cause the supply curve to move this way
What is a DECREASE/SHIFT TO THE LEFT IN SUPPLY?
The point at which quantity supplied and quantity demanded are equal
What is EQUILIBRIUM?
As price goes up, the quantity demanded goes down and vice versa
What is the LAW OF DEMAND?
Directional change that results with a decrease in demand driven by factors other price
What is a SHIFT TO THE LEFT?
The motivating force that leads producers to produce
What is PROFIT MOTIVE?
Advancements in technology will lead to this result in supply
What is an INCREASE/a SHIFT TO THE RIGHT IN SUPPLY?
Occurs when the quantity supplied does not equal the quantity demanded in the market
What is DISEQUILIBRIUM?
takes place when a consumer reacts to a rise in the price of a good by consuming less of that good and more of an equally satisfying substitute good
What is the SUBSTITUTION EFFECT?
Non-Price Determinants represented by the acronym TRIBE
What are TASTES, (price of) RELATED GOODS, INCOME, BUYERS (number of), EXPECTATIONS (about the future)?
Measures a firm's responsiveness to changes in the price of a good or service
What is ELASTICITY OF SUPPLY?
A government payment to suppliers in a particular industry or market
What is a SUBSIDY?
The point at which demand is greater than supply
What is a SHORTAGE?
a graphical depiction of the quantities demanded at various prices
What is a DEMAND CURVE?
Two goods that are purchased and used together
What are COMPLEMENTS?
How much of a good or service a producer is willing and able to sell at a specific price
What is QUANTITY SUPPLIED?
Is the deciding factor in a business' decision regarding where they will locate their operations
What are TRANSPORTATION COSTS?
When quantity supplied is greater than quantity demanded
What is a SURPLUS?
a table that depicts the quantities demanded at various prices for all the buyers in a market
What is a MARKET DEMAND SCHEDULE?
Two goods that are used in place of one another
What are SUBSTITUTES?
The label of the vertical axis on a Supply and Demand model
What is PRICE?
These factors cause the entire supply curve to shift
What is SPITE (# of SUPPLIERS, PRODUCTIVITY, price of INPUTS,TAXES and subsidies, future EXPECTATIONS)?
Two ways in which the government can control prices in the market
What are PRICE FLOORS and PRICE CEILINGS?