Chapter 7 Supply and Demand

According to substitution effect, if 2 items satisfy the same need and the price of one rises

Situation in which the quantity supplied is greater that the quantity demanded

Economic concept dealing with consumers' responsiveness to an increase or decrease in price

Situation in which the rise or fall of a product's price greatly affects amount people buy

a legal minimum price below which a good or service may not be sold

Amount of a good or service that producers are willing and able to sell

Situation in which the quantity demanded is greater than the quantity supplied

Prices on goods and services are determined

Amount of a good or service that consumers are able and willing to buy

Economic rule stating that price and quantity supplied move in the same direction

amount producers are willing to supply is equal to the amount consumers are willing to buy

Amount of a good or service that a producer is willing and able to supply at a specific price

Inability to buy the same quantity of a good if prices rise while income does not

Process of freely exchanging goods and services between buyers and sellers

Use of science to develop new products and new methods for producing goods and services

Which statement reflects the inverse relationship between quantity demanded and price?

distribution of goods and services based on something other than price

A government-set maximum price that can be charged for a good or service

Situation where product's price change has little impact on the quantity demanded by consumers