Demand and Supply (Economics)

Recall cards on how markets set prices. Demand and the law of demand (price and quantity demanded move inversely), supply and the law of supply (they move together), demand and supply schedules and curves, and market equilibrium where the two curves cross. Surpluses (excess supply above equilibrium) and shortages (excess demand below equilibrium) and how prices adjust back. Movements along a curve versus shifts of the whole curve: normal and inferior goods, substitutes and complements, ceteris paribus, and the factors that shift demand and supply. The four-step process for analyzing how an event changes equilibrium, and the outcomes of demand and supply shifts. Price controls: binding price ceilings and floors, with rent control and the minimum wage as examples. Efficiency: consumer surplus, producer surplus, social (total) surplus, and the deadweight loss created when a market produces at an inefficient quantity.