Demand and Supply Comprehensive Review

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Demand

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The quantity of a good or service that consumers are willing and able to purchase at various prices.

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Law of Demand

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States that, with all other factors being equal, as the price of a good increases, the quantity demanded decreases. Conversely, as the price decreases, quantity demanded increases.

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Supply

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The quantity of a good or service that producers are willing and able to offer for sale at various prices.

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Law of Supply

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States that, with all other factors being equal, as the price of a good increases, the quantity supplied increases. Conversely, as the price decreases, quantity supplied decreases.

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Equilibrium

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The state in which the quantity supplied equals the quantity demanded, leading to a stable market price.

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Market

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A group of buyers and sellers engaged in trade, along with the rules and arrangements governing their transactions.

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Quantity demanded

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The specific amount of a good that buyers are willing to purchase at a given price.

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Demand curve

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A graphical representation showing the relationship between the price of a product and the quantity demanded. It is typically a downward-sloping line.

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Demand schedule

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A table listing the quantity of a good that will be demanded at various prices.

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Shift in demand

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Occurs when a factor other than price causes a change in the quantity demanded at every price. This shifts the entire demand curve to the left (decrease) or right (increase).