Market

an arrangement where buyers and sellers come together/into contact to exchange goods and services at agreed prices.

Demand

It refers to the consumer’s desire and ability to purchase a good or service at various prices during a certain time frame, assuming other factors remain unchanged

Law of Demand

It explains that there is an inverse relationship between price and quantity demanded: as price rises, demand falls, and as price falls, demand rises

Quantity Demanded

the specific amount of a good or service that a consumer is willing and able to buy at a particular price over a certain period of time, ceteris paribus.

Market Demand

the total quantity of a good or service that all consumers in a market are willing and able to buy at various prices during a specific time period.

It is found by adding up all individual demands at each price level.

= Everyone’s demand added together

Individual Demand

refers to the quantity of a good or service that a single consumer is willing and able to purchase at different prices over a given period of time, ceteris paribus

It is the quantity of a good that an individual consumer is ready to buy at various prices

Changes in Demand

shift in the demand curve due to factors like income, consumer preferences, or the prices of related goods, not because of a change in price

Changes in quantity demanded

refers to a movement along the demand curve that occurs when the price of the good or service changes, ceteris paribus

Substitute

a good or service that can be used in place of another. When the price of one rises, the demand for its substitute increases, ceteris paribus

Complement

a good or service that is used together with another good. When the price of one good rises, the demand for its - falls, ceteris paribus.

Shortage

situation where the quantity demanded of a good or service is greater than the quantity supplied at the current price, leading to unsatisfied consumer demand

Excess Demand

happens when the quantity demanded exceeds the quantity supplied at a given price, often leading to a shortage in the market. Market Price is below the equilibrium price

Quantity Supplied

refers to the specific amount of a good or service that a producer is willing and able to offer for sale at a particular price over a certain period of time, ceteris paribus.

Supply

the quantity of a good or service that producers are willing and able to provide for sale at various prices over a specific time period, ceteris paribus

Market Supply

the total amount of a good or service that all producers in a market are willing and able to supply at different price levels during a given period of time.

Law of Supply

explains that there is a direct relationship between price and quantity supplied: as price rises, supply rises, and as price falls, supply falls.

Excess Supply

occurs when the quantity supplied of a good or service exceeds the quantity demanded at a given price, leading to a surplus in the market. Market price above equilibrium price

Changes in supply

refer to shifts in the entire supply curve caused by factors other than the good’s own price—such as production costs, technology, taxes, or the number of sellers—which lead to a change in the quantity supplied at all prices.

Changes in quantity supplied

refers to a movement along the supply curve caused solely by a change in the price of the good or service, ceteris paribus

Surplus

occurs when the quantity supplied of a good exceeds the quantity demanded at a given price, typically because the price is set above the equilibrium level.

Market equilibrium

the point where quantity demanded equals quantity supplied at a specific price,resulting in no tendency for the price to change, ceteris paribus.

Market disequilibrium

occurs when the quantity demanded does not equal the quantity supplied at the current price, leading to either excess demand or excess supply in the market

Equilibrium Price

the price at which the quantity of a good demanded by consumers equals the quantity supplied by producers, resulting in a stable market condition with no tendency for price to change, ceteris paribus.

4. There’s no excess demand or excess supply at this price.

   • It is found where the demand and supply curves intersect.