Overview
Market demand and equilibrium are essential concepts in economics that help us understand how prices and quantities are determined in a market. Demand refers to the quantity of a good that consumers are willing to buy at different prices, while supply refers to how much producers are willing to sell...
Key Terms
Example: The demand curve for coffee slopes downward, indicating that lower prices increase demand.
Example: The supply curve for smartphones slopes upward, showing that higher prices encourage more production.
Example: The equilibrium price for a new video game is $60, where supply meets demand.
Example: An increase in consumer income can shift the demand curve for luxury cars to the right.
Example: A decrease in the cost of raw materials can shift the supply curve for furniture to the right.
Example: In a competitive market, the price of bread stabilizes at the equilibrium point.