Ch 2: Overview of Supply & Demand in Microeconomics

About This Chapter

Learn key concepts in supply and demand with the comprehensive lessons in this chapter. Use this resource as a study aid for your economics class or as a guide to help you prepare for a credit-granting exam.

Overview of Supply and Demand in Microeconomics - Chapter Summary

Learn about pricing, market forces and market equilibrium as they relate to supply and demand in microeconomics by referring to this chapter. Lessons offer definitions, examples and relevant formulas to clearly explain what you need to know about each topic. They focus on such topics as the supply curve, price elasticity, price ceilings and shortages and surpluses. Access these lessons from any device, at any time, and check your understanding by taking brief self-assessment quizzes. Once you have completed a thorough review of this chapter, you should be able to do the following:

  • Understand the meanings of supply and demand curves, explain shifts in these curves and detail how they are affected by market changes
  • List causes of supply and demand in microeconomics
  • Explain how government intervention can control supply
  • Relate how market forces can manipulate supply and demand
  • Identify shortages and surpluses in microeconomics
  • Define price ceilings and price floors
  • Compare derived and inelastic demand
  • Discuss cross price elasticity, income elasticity and price elasticity of demand

14 Lessons in Chapter 2: Overview of Supply & Demand in Microeconomics
Test your knowledge with a 30-question chapter practice test
Understanding the Demand Curve in Microeconomics

1. Understanding the Demand Curve in Microeconomics

Learn what the demand curve in microeconomics is. Find out the common components of the demand curve and how they are created. See what causes a movement along a demand curve and what causes a shift of the entire curve.

The Supply Curve in Microeconomics

2. The Supply Curve in Microeconomics

Learn about the supply curve and its unique characteristics. Find out some of the common terms used when discussing the supply curve and the difference between a movement along a supply curve and a shift of the entire curve. See some examples of each.

Causes of Supply and Demand Changes in Microeconomics

3. Causes of Supply and Demand Changes in Microeconomics

Learn what causes movements along the supply and demand curves. See how market forces work to cause these movements and the important role that price plays in this.

Market Equilibrium from a Microeconomics Perspective

4. Market Equilibrium from a Microeconomics Perspective

Learn about the definition of market equilibrium. Learn how to identify the equilibrium point on a supply and demand graph and discover what causes this point to change in our everyday lives.

Identifying Shortages and Surpluses in Microeconomics

5. Identifying Shortages and Surpluses in Microeconomics

Supply shortages and surpluses are inefficient for business, but economics seeks to avoid them. In this lesson, find out how they happen, as well as how businesses work to avoid them.

Microeconomic Shifts in Supply and Demand Curves

6. Microeconomic Shifts in Supply and Demand Curves

Learn about the important forces that can cause the demand and supply curve to shift. Discover how this affects equilibrium and the prices you pay for goods and services.

Using Market Forces to Manipulate Supply and Demand

7. Using Market Forces to Manipulate Supply and Demand

While the forces of supply and demand are powerful, they are not immobile. This lesson explains how various market forces can cause the supply and demand curves to shift.

Price Ceilings and Price Floors in Microeconomics

8. Price Ceilings and Price Floors in Microeconomics

Governments can restrict prices from going too low or too high through use of price ceilings. This lesson explains these concepts, as well as problems that can arise from their use.

Controlling Supply: Government Intervention & Market Forces

9. Controlling Supply: Government Intervention & Market Forces

Sometimes, despite the best efforts of the market, a heavy hand is needed to control supply. This lesson looks at how the government and the market can work to do just that.

Derived vs. Inelastic Demand in Business Markets

10. Derived vs. Inelastic Demand in Business Markets

The simple law of demand governs much of the business world, however, there are some exceptions. In this lesson, we take a look at two of them - the idea of derived demand and the idea of inelastic demand.

Price Elasticity of Demand in Microeconomics

11. Price Elasticity of Demand in Microeconomics

Discover the definition and formula for price elasticity of demand. See some real-world examples of how it is calculated, and find out what it means for demand of a good to be inelastic or elastic.

Cross Price Elasticity of Demand: Definition and Formula

12. Cross Price Elasticity of Demand: Definition and Formula

Learn what cross price elasticity of demand means. Find out why business owners and economists like to know cross price elasticity, and discover how to calculate it. See some everyday examples.

Income Elasticity of Demand in Microeconomics

13. Income Elasticity of Demand in Microeconomics

The income elasticity of demand is a useful tool that measures what happens to consumer demand for products and services when incomes change. We will work through the formula and interpret what the answers mean.

Price Elasticity of Supply in Microeconomics

14. Price Elasticity of Supply in Microeconomics

Price elasticity of supply is similar to elasticity of demand, but there are differences too. Let's explore them by looking at some real-life examples of elastic and inelastic supply.

Chapter Practice Exam
Test your knowledge of this chapter with a 30 question practice chapter exam.
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Practice Final Exam
Test your knowledge of the entire course with a 50 question practice final exam.
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