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| demand | The quantity (amount) of goods and services that consumers are willing to buy at a particular price. |
| Law of Demand | As the price of a good/service increases, the quantity that people are willing and able to buy will decrease. |
| supply | The quantity (amount) of a good or service that producers are willing and able to offer at a particular price. |
| Law of Supply | As the price customers are willing to pay for a good or service increases, the suppier will be willing to supply more of the good or service. |
| equilibrium price | The price at which the quantity demanded by buyers equals the quantity supplied by sellers; also calld the market-clearing price. |
| equilibrium quantity | The quantity demanded equals the quantity supplied. |
| price | The amount of money paid by the consumer to the seller. |
| shortage | Exists when the quantity demanded exceeds the quantity supplied. |
| surplus | Exists when the quantity supplied exceeds the quantity demanded. |
| price ceiling | The highest price that can be charged for a good or service. Usually occur in shortage situations. |
| price floor | The lowest price at which one can buy a good or service. Usually occur in surplus situations. |
