| A | B |
|---|
| Equilibrium Price | Condition that exists when the amount of a product supplied is equal to amount of the product demanded |
| Demand | The amount of goods and services consumers are willing and able to buy |
| Supply | The amount of goods and services that producers will provide |
| Market Economy | A system in which economic decisions are made in the marketplace according to the laws of supply and demand |
| Law of Supply | When price and quantity supplied move in the same direction (up or down) |
| Law of Demand | When price of a good/service increases, the demand falls or when price decreases, demand will rise |
| Surplus | When supply exceeds demand |
| Shortage | When demand exceeds supply |
| Equilibrium Price | The point at which supply and demand meet |
| Surplus | An oversupply |
| Law of Supply | The higher the price, the more producers will supply; the lower the price, the less they will supply |
| Law of Demand | Consumers will generally buy less of an item at a higher price |
| A factor affecting demand | Substitute goods |
| A factor affecting supply | Cost of production |
