Unit 2: Supply, Demand, & Equilibrium Assessment

The combination of desire, ability, and willingness to buy a product.

Consumers will buy more of a product at lower prices and less at higher prices.

A table showing the quantity of a good or service that buyers are willing and able to buy at different prices during a period of time.

A graph of the relationship between the price of a good and the quantity demanded

An increase in income means people can afford to buy more at all possible prices. A decrease in income means people buy less.

The popular items have more demand. People will buy less of a product when they get tired of it. Advertising, fashion trends, changes in season all affect this...

Competing products that can be used in place of one another. The demand for a product tends to increase if the price of it’s substitute goes up. The demand for a product tends to decrease if the price of it’s substitute goes down.

Products that increase the use of other products. When the demand of one product increases, the demand of the complementing product increases. When demand of one product decreases, the demand of the complementing product decreases.

Example: Costco Ad. Holding off buying until the ad takes effect. Purchasing less would cause a decrease in demand. Example: Hurricane Preparedness. Start buying water, non-perishables. Purchasing more would cause an increase in demand.

The amount of a product offered for sale at all possible prices

More will be offered for sale at higher prices than at lower prices.

A table showing the amount of a good or service that producers are willing and able to offer for sale at each possible price during a given period of time.

A graph of the relationship between the price of a good and the quantity supplied.

If the cost of oil per barrel decreases, then the supply of gas will increase. If the cost of oil per barrel increases, then the supply of gas will decrease.

If the In n’ Out employees are happy at work, the supply will increase. If the In n’ Out employees are unhappy at work, then the supply will decrease.