supply Flashcards
(31 cards)
What is Supply?
The amount of product or service a seller has
Supply represents the total quantity of a good or service that producers are willing to sell at a given price.
What is Demand?
The amount of people willing to pay for their product or service
Demand reflects consumer willingness to purchase goods or services at various price levels.
What is Price?
The amount of money the seller can charge
Price is determined by the interaction of supply and demand in the market.
What does the Law of Demand state?
If demand increases and supply remains constant, a shortage will occur leading to a higher price.
Conversely, if demand decreases and supply remains constant, a surplus will occur leading to a lower price.
What happens when the price of a product falls?
The quantity demanded will increase, and vice versa
This relationship is illustrated by the downward slope of the demand curve.
Factors affecting Quantity Demanded include:
- Price
- Income
- Price of related goods (compliments & substitutes)
- Tastes and preferences
- Expectations of rising or falling prices
- Population
These factors can cause shifts in the demand curve.
What does the Law of Supply state?
As the price of a product falls, the quantity being offered for sale decreases, and vice versa
This indicates a direct relationship between price and quantity supplied.
Factors affecting Quantity Supplied include:
- Number of producers
- Prices of related products (compliments and substitutes)
- Technology
- Expectations
- Prices of inputs
Changes in these factors can lead to shifts in the supply curve.
What is the Equilibrium Point?
The point where the Demand curve and the Supply curve meet
At this point, the quantity demanded equals the quantity supplied.
What is Elasticity in economics?
A term used to describe how one variable changes in response to another variable that has changed value
Elasticity measures the sensitivity of demand or supply to changes in price.
How is Elasticity related to demand?
It measures how much the price of something can fluctuate before it has a negative impact on sales
Understanding elasticity is crucial for setting appropriate price points.
What is Inflation?
The rate at which the general level of prices for goods and services is rising
Inflation leads to a decrease in the purchasing power of currency.
Types of Inflation include:
- Demand-Pull inflation
- Cost-Push inflation
- Built-In inflation
Each type has different causes and implications for the economy.
What is the most commonly used inflation index in Canada?
The Canadian Consumer Price Index (CPI)
The CPI measures changes in the price level of a basket of consumer goods and services.
True or False: Inflation can be viewed positively or negatively.
True
Individuals with tangible assets may benefit from inflation as it increases the value of their assets, while those holding cash may see a decline in value.
What is Supply?
The amount of product or service a seller has
Supply represents the total quantity of a good or service that producers are willing to sell at a given price.
What is Demand?
The amount of people willing to pay for their product or service
Demand reflects consumer willingness to purchase goods or services at various price levels.
What is Price?
The amount of money the seller can charge
Price is determined by the interaction of supply and demand in the market.
What does the Law of Demand state?
If demand increases and supply remains constant, a shortage will occur leading to a higher price.
Conversely, if demand decreases and supply remains constant, a surplus will occur leading to a lower price.
What happens when the price of a product falls?
The quantity demanded will increase, and vice versa
This relationship is illustrated by the downward slope of the demand curve.
Factors affecting Quantity Demanded include:
- Price
- Income
- Price of related goods (compliments & substitutes)
- Tastes and preferences
- Expectations of rising or falling prices
- Population
These factors can cause shifts in the demand curve.
What does the Law of Supply state?
As the price of a product falls, the quantity being offered for sale decreases, and vice versa
This indicates a direct relationship between price and quantity supplied.
Factors affecting Quantity Supplied include:
- Number of producers
- Prices of related products (compliments and substitutes)
- Technology
- Expectations
- Prices of inputs
Changes in these factors can lead to shifts in the supply curve.
