Supply & Demand

Match the terms

Law of Demand

States that an increase in a goods price causes a decrease in the quantity demanded and that a decreased in the price causes an increase in the quantity demanded

Demand

Amount of a good or service that a consumer is willing and able to buy at possible prices during a given time

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Income Effect

The more purchasing power people have which means the ability they have to buy things the greater the demand becomes

Substitution Effect

This is the tendency for consumers to substitution any slightly cheaper good for relativity the same product

Matching

Demand Curve

Shows the relationship between price and quantity demanded

Diminishing Marginal Utility

Demand is not limitless therefore every time a product is consumed the utility of the product diminishes

Matching

Market Size

Companies can either increase or decrease the area in which they sell their product

Consumer Tastes or Preferences

This can fluctuate wildly and can be influenced by advertising and different trends that hits consumers

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Prices of Related Goods

This can determine how much or your product consumers are able to buy

Income

If a competitor is putting out a similar good at a low price often this forces like companies to do the same

Matching

Consumer Expectations

-Meaning that people may buy something assuming that they will be able to afford it in the future and vice versa

Elastic Demand

This occurs when a small change in the price of a good causes a major change in the quantity of demanded

Matching

Inelastic Demand

This occurs when a change in the products price has little effect on the demand

Supply

Is the quantity of goods and services that producers are willing to offer at various prices in a given time

Matching

The Law of Supply

The amount of money that remains after producers have paid off all of their costs

Profit

States that produces supply more goods and services when they sell them at higher prices and fewer goods and services when they must sell them at lower prices

Matching

Elasticity of Supply

This exists when a small change in price causes a major change in the quantity supplied

Elastic Supply

This works the same way as elasticity of demand because price changes have an effect on the quantity supplied

Matching

Marginal Product

Is all the product a company makes in a given period of time with a given amount of input

Total Product

Is the change in output generated by adding one more unit of input

Supply & Demand

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