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Econ Unit 2: Supply & Demand

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voluntary exchange
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Terms in this set (17)
When buyers and sellers freely and willingly engage in market transactions
Image: voluntary exchange
When prices DECREASE, quantity demanded INCREASES.
When prices INCREASE, quantity demanded DECREASES.
It is an indirect relationship between price and quantity supplied.
Image: law of demand
When prices INCREASE, quantity supplied INCREASES.
When pricesDECREASE, quantity supplied DECREASES.
It is a direct relationship between price and quantity supplied.
Image: law of supply
When price has reached quantity supplied and quantity demanded. An intersection of supply and demand curves. Reach by the agreement of buyers and sellers.
Image: equilibrium
is found at the intersection of the market demand and supply curves. It is the point at which the quantity demanded by consumers is equal to the quantity supplied by producers; also called market clearing price
Image: equilibrium price

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