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.
Analyzing a situation, predicting the likely possible outcomes, and deciding what prices are worth paying and what outcomes to pursue.
3. cost of relate products
4. number of potential customers
determinants of demand
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
a curve that shows the relationship between the price of a product and the quantity of the product supplied.