MICROECONOMICS

DEMAND AND SUPPLY

DEFINE DEMAND AND SUPPLY

• DEMAND: The amount of a particular economic good or service that a consumer or group of consumers will want to purchase at a given price.

SLOPE OF DEMAND: The demand curve is usually downward sloping, since consumers will want to buy more as price decreases.

• SUPPLY: The total amount of a good or service available for purchase; along with demand, one of the two key determinants of price.

SLOPE OF SUPPLY:The supply curve usually slopes upward, since higher prices give producers an incentive to supply more in the hope of making greater revenue.

DEMAND AND SUPPLY GRAPHS

• DEMAND • SUPPLY

MARKET EQUILIBRIUM POINT

DEFINITION• A state of equality between

the level of available supply of a product or service, and the amount of demand for that product or service.

GRAPH

SURPLUS VS SHORTAGE

• SHORTAGE: shortage is just the opposite where demand is high and supply is low.

• SURPLUS: economic surplus means that there is more of the product freely available than the demand for the product asks for.

SHORTAGE VS SURPLUS

MACROECONOMICS

CONTINUES