Buyers and sellers in perfectly competitive markets who must accept the price the market determines.
The amount of a good that buyers are willing and able to purchase.
A normal good is a good for which, other things being equal, an increase in income leads to an increase in demand.
A policy to discourage smoking shifts the demand curve for cigarettes to the left, indicating a decrease in demand.
By adding horizontally the individual supply curves of all sellers.
A movement along the supply curve.
A market structure where there is only one seller who sets the price.
Complements are two goods for which an increase in the price of one leads to a decrease in the demand for the other.
A table that shows the relationship between the price of a good and the quantity demanded, holding constant everything else that influences how much of the good consumers want to buy.
A shift in the demand curve occurs when something alters the quantity demanded at any given price, resulting in the demand curve moving either to the right (increase in demand) or to the left (decrease in demand).
If the number of buyers increases, the quantity demanded in the market would be higher at every price, leading to an increase in market demand.
A graph of the relationship between the price of a good and the quantity supplied.
Input prices, technology, expectations, and the number of sellers.
The claim that the price of any good adjusts to bring the quantity supplied and the quantity demanded for that good into balance.
It raises the costs of production for ice cream, shifting the supply curve to the left and increasing the equilibrium price due to excess demand.
A competitive market is a market in which there are many buyers and many sellers so that each has a negligible impact on the market price.
Because, other things being equal, a lower price means a greater quantity demanded.
A change in the price of the good itself represents a movement along the demand curve, rather than a shift in the curve.
The supply curve slopes upward, indicating that a higher price increases the quantity supplied.
An increase in supply refers to any change that raises the quantity supplied at every price, resulting in a rightward shift of the supply curve.
There is a shortage of the good, causing buyers to wait in lines and sellers to raise prices, which decreases quantity demanded and increases quantity supplied until equilibrium is reached.
A movement along a fixed supply curve that indicates a change in the amount of a good that producers are willing to sell due to a change in price.
When equilibrium quantity falls, it indicates that the total amount of goods sold in the market has decreased, often due to a decrease in supply or a decrease in demand.
A perfectly competitive market has two characteristics: (1) The goods offered for sale are all exactly the same, and (2) the buyers and sellers are so numerous that no single buyer or seller has any influence over the market price.
The sum of all the individual demands for a particular good or service.
A shift in the demand curve occurs when there is a change in a relevant variable that is not measured on either axis, such as income, prices of related goods, tastes, expectations, or the number of buyers.
The claim that, other things being equal, the quantity supplied of a good rises when the price of the good rises.
Advancements in technology can reduce production costs, thereby increasing the supply of a good by making it more profitable to produce.
A situation in which quantity supplied is greater than quantity demanded.
A market is a group of buyers and sellers of a particular good or service.
The demand curve shows what happens to the quantity demanded of a good when its price varies, holding constant all the other variables that influence buyers.
The amount of a good that sellers are willing and able to sell.
The price that balances quantity supplied and quantity demanded.
The market price is above the equilibrium price, leading to a quantity supplied that exceeds the quantity demanded.
A movement along a fixed demand curve that indicates a change in the amount of a good that consumers are willing to buy due to a change in price.
When both supply and demand curves shift simultaneously, the equilibrium price may rise or fall, and the equilibrium quantity may increase or decrease, depending on the magnitude and direction of the shifts.
By summing the individual demand curves horizontally to find the total quantity demanded at any price.
Market demand is the sum of the quantities demanded by all buyers at each price, represented by the horizontal addition of individual demand curves.
An inferior good is a good for which, other things being equal, an increase in income leads to a decrease in demand.
A 10 percent increase in the price of cigarettes causes a 4 percent reduction in the quantity demanded.
The supply of a good is negatively related to the price of the inputs used to make the good; when input prices rise, producing the good becomes less profitable, leading to a decrease in supply.
There is a surplus of the good, leading suppliers to cut prices, which increases quantity demanded and decreases quantity supplied until equilibrium is reached.
Hot weather shifts the demand curve for ice cream to the right, indicating that the quantity of ice cream demanded is higher at every price.
An increase in the price of sugar reduces the supply of ice cream, causing the supply curve to shift to the left.
A graph of the relationship between the price of a good and the quantity demanded.
Substitutes are two goods for which an increase in the price of one leads to an increase in the demand for the other.
A movement along the demand curve occurs when there is a change in the price of the good, resulting in a different quantity demanded at that price, without shifting the entire demand curve.
A decrease in supply refers to any change that reduces the quantity supplied at every price, resulting in a leftward shift of the supply curve.
A situation in which quantity demanded is greater than quantity supplied.
When an event shifts the supply or demand curve, it changes the equilibrium in the market, resulting in a new price and a new quantity exchanged between buyers and sellers.
Supply and demand are determined by the behavior of buyers and sellers as they interact with one another in competitive markets.
The quantity demanded at each price.
A decrease in demand occurs when any change reduces the quantity demanded at every price, causing the demand curve to shift to the left.
Policies such as public service announcements, mandatory health warnings, and the prohibition of cigarette advertising aim to shift the demand curve for cigarettes to the left, reducing the quantity demanded at any given price.
A table that shows the relationship between the price of a good and the quantity supplied, holding constant everything else that influences how much of the good producers want to sell.
A firm's expectations about future prices can affect its current supply; if a firm anticipates higher future prices, it may reduce current supply to store more for later.
Prices eventually move toward their equilibrium levels, correcting temporary surpluses and shortages.
A shift in the demand curve that indicates a change in the amount of a good that consumers are willing and able to buy at every price.
The claim that, other things being equal, when the price of a good rises, the quantity demanded falls, and when the price falls, the quantity demanded rises.
An increase in demand occurs when any change raises the quantity demanded at every price, causing the demand curve to shift to the right.
A tax that raises the price of cigarettes results in a movement along the demand curve rather than a shift, as it changes the quantity demanded at the new price.
How the total quantity supplied varies as the price of the good varies, holding constant all other factors.
A situation in which the market price has reached the level at which quantity supplied equals quantity demanded.
'Supply' refers to the position of the supply curve, while 'quantity supplied' refers to the amount suppliers wish to sell at a given price.
The equilibrium quantity is the quantity of a good or service that is supplied and demanded at the equilibrium price.
Any change that raises the quantity that buyers wish to purchase at any given price shifts the demand curve to the right, while any change that lowers the quantity shifts it to the left.
Teenagers are especially sensitive to the price of cigarettes; a 10 percent increase in price leads to a 12 percent drop in teenage smoking.
A higher price means a greater quantity supplied, according to the law of supply.
The supply curve shifts.
When demand increases, the equilibrium price rises, and the equilibrium quantity also increases.
A heat wave increases the demand for ice cream, causing the demand curve to shift to the right.
Raising the price of cigarettes through taxation encourages smokers to reduce the number of cigarettes they smoke, but this does not represent a shift in the demand curve.
The sum of the supplies of all sellers in a market.
The quantity supplied and the quantity demanded at the equilibrium price.
The market price is below the equilibrium price, resulting in a quantity demanded that exceeds the quantity supplied.
A shift in the supply curve that indicates a change in the amount of a good that producers are willing and able to sell at every price.
A shift in the supply curve occurs when there is a change in the quantity supplied at every price level, often due to factors like production costs, technology, or number of suppliers.
The three steps are: 1) Decide whether the event shifts the supply curve, the demand curve, or both; 2) Determine the direction of the shift (right or left); 3) Use the supply-and-demand diagram to compare the initial equilibrium with the new one.
The outcomes depend on the relative size of the shifts; the equilibrium price will rise, but the impact on equilibrium quantity can either rise or fall.
When there is an increase in demand, the equilibrium price typically rises as consumers are willing to pay more for the increased quantity demanded.
The equilibrium price rises as the demand curve shifts to the right, indicating that consumers are willing to buy more ice cream at any given price.
A decrease in supply causes the equilibrium price to rise.
