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Market
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a group of buyers and sellers of a particular good or service.
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Competitive market
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a market in which there are many buyers and many sellers so that each has a negligible impact on the market price
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Quantity demanded
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the amount of a good that buyers are willing and able to purchase
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Law of demand
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the claim that, other things being equal, the quantity demanded of a good falls when the price of the good rises
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Demand schedule
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a table that shows the relationship between the price of a good and the quantity demanded
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Demand curve
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a graph of the relationship between the price of a good and the quantity demanded
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Normal good
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a good for which, other things being equal, an increase in income leads to an increase in demand
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Inferior good
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a good for which, other things being equal, an increase in income leads to a decrease in demand
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Substitutes
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two goods for which an increase in the price of one leads to an increase in the demand in the other
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Complements
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two goods for which an increase in the price of one leads to a decrease in the demand for the other
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Quantity supplied
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the amount of a good that sellers are willing and able to sell
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Law of supply
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the claim that, other things being equal, the quantity supplied of a good rises when the price of the good rises
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Supply schedule
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a table that shows the relationship between the price of a good and the quantity supplied
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Supply curve
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a graph of the relationship between the price of a good and the quantity supplied
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Equilibrium
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a situation in which the market price has reached the level at which quantity supplied equals the quantity demanded
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Equilibrium price
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the price that balances quantity supplied and quantity demanded
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Equilibrium quantity
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the quantity supplied and the quantity demanded at the equilibrium price
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Surplus
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a situation in which quantity supplied is greater than quantity demanded
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Shortage
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a situation in which quantity demanded is greater than quantity supplied
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shifts in the demand curve
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income, prices of related goods, tastes, expectations, number of buyers
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movement along the demand curve
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a change in the price of the good itself
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shifts in the supply curve
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input prices, technology, expectations, number of sellers
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movement along the supply curve
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a change in the price of the good itself
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