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| Place were buying, selling and trading take place |
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| A showing of how much a good or service people will buy at any price during a specific period |
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When price goes up, people buy less
when price drops, people buy more |
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| Graph showing the demand schedule, a negatively sloped line showing the relationship with price and quantity |
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| Demand of all in the marketplace for a particular good or service |
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| How do you find market demand? |
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| By averaging the demand by the number of people who want them. Demand+buyers=average |
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| Ceteris Paribus conditions |
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| Factors between the price and quantity that are unchanged along the curve. Changes in these factors cause the curve to shift. |
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Goods like shoes, computers and cars that rise in demand when consumer income rises
-ex: I have more money, ill go buy some shoes (shoes would be the normal goods) |
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Goods that are not demanded as much when a consumer's income rises
-ex: the bus, canned food, welfare |
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| Two goods can be substitutes when a change in price of one causes a shift in demand for the other |
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| 2 types of inter-dependencies |
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1. Substitutes
2. Compliments |
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When one good is benefited from a drop in price from another good
-ex: computers that drop to $100 allows people to go and buy computer appliances |
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| Consumers expectations with future prices and incomes will prompt them to buy more or less of something without a change in its current price |
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| Consumers either want the good or don't want it, changing the demand for the good entirely |
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| Changes in quantity demand |
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Definition
| When price changes, quantity demand changes |
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| Amount of goods at a certain price |
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Increase in price=increase in quantity
decrease in price=decrease in quantity |
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| Graph showing price vs. supply |
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Payment to the producer from the government.
ex: EU gov. giving payment to a road company to help transportation |
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| Clearing market/equilibrium price |
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Price that clears the market.
-when quantity demanded equals quantity supplied |
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| Point where demand intersects with supply |
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| When demand is higher than supply |
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| Supply is more than the demand |
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