Microeconomics

Demand and Supply

• Demand: The quantity of a good or service that consumers are willing and able to purchase at different prices.
• Supply: The quantity of a good or service that producers are willing and able to sell at different prices.
• Equilibrium price: The price at which the quantity demanded equals the quantity supplied.
• Factors affecting demand: Income, prices of related goods, consumer tastes and preferences, expectations.
• Factors affecting supply: Costs of production, technology, weather, government policies.
• Exam tips: Understand the law of demand and supply, be able to construct and interpret demand/supply diagrams, analyze how changes in factors affect equilibrium price and quantity.