Micro Ch_3 Demand and Supply Vocab

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Ceteris paribus

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All other things being equal.

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Complements (complementary goods)

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Goods that are often used together so that consumption of one good tends to increase consumption of the other.

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Consumer surplus

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The extra benefit consumers receive from buying a good or service, measured by what the individuals would have been willing to pay minus the amount that they actually paid.

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Deadweight loss

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The loss in social surplus that occurs when a market produces an inefficient quantity.

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Demand

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The quantity of a good or service that consumers are willing and able to buy.

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Demand curve

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A graphic representation of the relationship between price and quantity demanded of a certain good or service, with quantity on the horizontal axis and the price on the vertical axis.

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Demand schedule

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A table that shows a range of prices for a certain good or service and the quantity demanded at each price.

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Economic surplus

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The sum of consumer surplus and producer surplus.

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Equilibrium

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The situation where quantity demanded is equal to the quantity supplied; the combination of price and quantity where there is no economic pressure from surpluses or shortages that would cause price or quantity to change.

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Equilibrium price

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The price where quantity demanded is equal to quantity supplied.