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Flashcards in Supply and Demand Deck (23):
0

Demand

desire to own something and the ability to pay for it

1

law of demand

when the prices lower, consumers will buy more

2

substitution effect

as prices rise, alternatives are found

3

demand curve

A graph that shows demand based on price

4

four factors leading to a change in demand

income, consumer expectations, population, and advertising

5

elasticity of demand

consumers react to a change in price

6

inelastic demand

demand not very sensitive to a change in price

7

elastic demand

demand that is very sensitive to a change in price

8

equilibrium

when quantity demanded quantity supplied are equal

9

disequilibrium

when quantity demanded is not the same as quantity supplied

10

Price ceiling

maximum price that can be charged for a good

11

Price floor

minimum price for a good

12

surplus

quantity supplied is more than quantity demanded

13

shortage

quantity supplied is less than quantity demanded

14

supply

amount of goods available

15

law of supply

higher the price, the more that is produced

16

supply curve

a graph that shows supply based on price

17

fixed costs

cost that doesn't change no matter how much is produced

18

variable costs

costs that rise or fall based on the quantity produced

19

total cost

fixed and variable costs together

20

marginal cost

The additional cost of producing one or more unit

21

subsidy

Government payment that supports a business or market

22

excise tax

text on a production or sale of a good