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Economics Supply and Demand Cheat Sheet (DRAFT) by

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This is a draft cheat sheet. It is a work in progress and is not finished yet.

Demand

DEMAND
An economic principle referring to a consumer's desire and ability to purchase goods and services and willin­gness to pay a price for a specific good or service
Demand Schedule
a table that shows the quantity demanded at each price
Demand Curve
The graphical repres­ent­ation of the demand The demand curve is downward sloping schedule
Demand Function
A demand function shows how the quantity demanded of a good depends on its determ­inants Qd=f(P)
Law of Demand
The law of demand states that the quantity demanded varies inversely with price, ceteris paribus

Non-price determ­inants of demand

Income
Future price expect­ations
Changes in tastes and prefer­ences
Changes in tastes and prefer­ences
Changes in the price of comple­mentary goods
Changes in the number of consumers
 

Market

MARKET
A market is an intera­ction between buyers and sellers of trading or exchange.
Product Market
it is the most common type of market because it is the place where finished goods and services are bought and sold
Factor Market
a place where factors of production (land, labour, capital) are bought and sold
Financial Market
financial markets facilitate the intera­ction between those who need capital with those who have capital to invest

Supply

Supply
Supply is the quantity of a good or service that a producer is willing and able to supply onto the market at a given price in a given time
Basic Law of Supply
an increase in price results in an increase in quantity supplied, ceteris paribus
Supply Curve
shows the relati­onship between market price and how much a firm is willing and able to sell

Other Determ­inants of Supply

Subsidies and Taxes
Technology
Other Related Goods
Resource Cost
Expect­ation
Size of the Market
 

Equili­brium

MARKET EQUILI­BRIUM
Equili­brium is a state of balance when demand is equal to supply
EQUILI­BRIUM PRICE
the price of a good or service when the supply of it is equal to the demand for it in the market
DETERM­INATION OF MARKET EQUILI­BRIUM
Market equili­brium is attained when the quantity demanded is equal to the quantity supplied