Supply & Demand

The willingness and ability of consumers to purchase a good at a given price level

Demand curve shows the relationship between price and quantity demanded

Inverse relationship between price and quantity

As price increases, quantity demanded decreases

As price decreases, quantity demanded increases

The amount of a good/service suppliers are willing to supply at a given price

Supply curve shows the relationship between price and quantity supplied

Positive/direct relationship between price and quantity supplied

As price increases, suppliers are willing to supply more of that good (and vice versa)

Movements are caused by changes in price

A movement resulting in an increase in quantity demanded/supplied is an EXPANSION

A movement resulting in a decrease in quantity demanded/supplied is an CONTRACTION