| A | B |
|---|
| Market forces | The interaction of demand and supply resulting in the price. |
| Demand | The want or willingness of consumers to buy a product. |
| Supply | The amount of a product that producers are willing and able to make and sell. |
| Market price | The price where demand and supply are equal. |
| Price mechanism | How changes in demand and/or supply will cause changes in price. |
| Utility | The measurement of satisfaction when we consume products. |
| Ceteris paribus | ‘all other things remaining unchanged’ |
| Law of diminishing utility | The more of a product one has |
| Normal goods | Rising incomes cause demand to stay the same or increase. |
| Inferior goods | Rising incomes cause the demand to fall. |
| Complements | A product that works with another product. |
| Substitutes | A product that can be used to replace another similar product. |
| Price elasticity of demand | The responsiveness of quantity demanded due to a change in price of a product. |
| Price elastic | Where a small change in price means a big change in quantity demanded. |
| Price inelastic | Where a big change in price means a small change in quantity demanded. |
| Income elasticity of demand | The responsiveness of quantity demanded due to a change in incomes. |
| Cross-elasticity of demand | The responsiveness of quantity demanded due to a change in the price of another product. |
