Supply and Demand

A change in a non-price determinant of supply.

As the price of a good rises, the quantity supplied increases, ceteris paribus.

The inverse relationship between price and quantity demanded.

As consumption increases, the additional satisfaction from consuming one more unit decreases.

A shortage occurs, and price tends to rise to reach equilibrium.

The point where quantity demanded equals quantity supplied.

A change in the price of the good itself.

The difference between what consumers are willing to pay and what they actually pay.

Income, tastes, future expectations, prices of related goods, and number of consumers.

As the price of a good falls, the quantity demanded increases, ceteris paribus.

A change in a non-price determinant of demand.

Signaling, incentive, and rationing.

The difference between the price producers receive and their minimum acceptable price.

As more units of a variable input are added, the additional output eventually decreases.

A lower price increases the consumer's real income, allowing them to buy more of the good.

When marginal benefit equals marginal cost and social surplus is maximized.

As the price of a good falls, it becomes more attractive compared to substitutes, increasing demand.

Increasing marginal costs and profit incentive as price rises.

A change in the price of the good itself.