Law of Supply
the rule that, holding everything else constant, increases in price cause increases in the quantity supplied, and decreases in price cause decreases in the quantity supplied.
Law of Demand
A law which states that when supplies of goods and services become plentiful, prices tend to drop. When supplies become scarcer, prices tend to rise.
the amount of goods and services people are willing to buy
Analyzing a situation, predicting the likely possible outcomes, and deciding what prices are worth paying and what outcomes to pursue.
where all sales of consumer products take place
where all sales of the factors of production take place
those who utilize services or products, and those who pay the bills.
3. cost of relate products
4. number of potential customers
determinants of demand
the affect that a change in price has on demand
the term given for the number of units that a firm is willing to sell.
goods that can be used in place of each other.
the result of paying over time, hiring less skilled workers, or simply the result of over-crowded. If a firm becomes too big it loses it's connection with the customer.
amount of a product that a firm offers for sale in excess of the quantity that customers are willing to buy.
amount of the product customers want to buy in excess of the quantity that a firm offers for sale.
circular flow model
A chart that shows the flow of money, goods and services, and the four factors of production
Two goods that are used together
a curve that shows the relationship between the price of a product and the quantity of the product supplied.
the point at which quantity demanded and quantity supplied are equal
No matter how high the price gets, people will still buy certain products.