★ Must-know
📌 According to the law of demand, when the price of a good or service decreases, the quantity demanded increases, and when the price increases, the quantity demanded decreases.
Further detail
📌 Demand is relatively insensitive to price for essential and difficult-to-replace goods such as eggs or fuel, but it is more sensitive for non-essential and easily substitutable services such as restaurant meals.
Essential eggs and fuel are relatively inelastic, whereas restaurant meals are more price-sensitive.
1. Supply refers to which economic quantity?
2. Concerning the law of supply, select the accurate statement(s):
3. Regarding the equilibrium price, which statement(s) is/are accurate?
What is demand in economics?
The quantity of resources consumers are willing to buy at a given price.
What happens to quantity demanded when price decreases?
Quantity demanded increases.
What happens to quantity demanded when price increases?
Quantity demanded decreases.
What is supply in economics?
The quantity of resources sellers are willing to sell at a given price.
What happens to quantity supplied when price increases?
Quantity supplied increases.
What happens to quantity supplied when price decreases?
Quantity supplied decreases.
It covers the core concepts of Competitive Market Equilibrium and Failures, organized by topic with the key definitions, explanations and takeaways, so it's easier to learn and remember.
Read the full study guide →The practice quiz has 16 multiple-choice questions, each with an explanation. Use it to check what you know and find your gaps.
Take the quiz (16 questions) →There are 37 flashcards on Competitive Market Equilibrium and Failures, with a question on the front and the answer on the back. Try to recall each answer before you flip, and let spaced repetition bring back the ones you miss.
See all 37 flashcards →Upload a PDF or paste your notes. Revizly writes a study guide, a practice quiz and flashcards in about a minute.