About This Chapter
Supply & Demand in Markets - Chapter Summary and Learning Objectives
According to economists, several factors can cause major shifts to supply and demand markets, and such changes can throw the market out of balance. In this chapter, you will examine the factors that cause market change, the legal and illegal methodologies used for influencing the market, and formulas used for calculating shifts in the market. To cover all of these topics and more, the chapter has been split into short lessons, allowing you to get a thorough understanding of each individual topic. At the close of this chapter, you should be more knowledgeable about the following:
- Microeconomics concepts and theories
- Demand and supply curves
- Factors that lead to demand and supply changes
- Market equilibrium
- Surpluses and shortages
- Techniques for manipulating market forces
- Marginal diagrams and deadweight welfare loss
- Price floors and price ceilings
- Government intervention
- Tax incidence
|The Concept of Ceteris Paribus in Economics||Analyze this concept and elaborate on the significance of such conceptual assumptions.|
|Understanding the Demand Curve in Microeconomics||Address how various factors contribute to a demand curve.|
|The Supply Curve in Microeconomics||Establish the distinguishing characteristics of a supply curve and point out which factors cause the curve.|
|Causes of Supply and Demand Changes in Microeconomics||Determine which influential market forces can change demand and supply or cause demand/supply curves, then provide examples.|
|Market Equilibrium from a Microeconomics Perspective||Define the effect of market equilibrium, and point out how demand and supply shifts can change market equilibrium.|
|Identifying Shortages and Surpluses in Microeconomics||Examine the demand and supply curves to ascertain the differences between surpluses and shortages.|
|Microeconomic Shifts in Supply and Demand Curves||Hypothesize potential market reactions resulting directly from surpluses and/or shortages.|
|Using Market Forces to Manipulate Supply and Demand||Identify the factors that are most likely to cause significant changes in the demand and supply curves, compare illegal and legal methods for manipulating the market, then discuss how such changes could influence market prices and equilibrium.|
|Price Ceilings and Price Floors in Microeconomics||Describe these two terms and demonstrate how either of these terms can affect equilibrium.|
|Controlling Supply: Government Intervention & Market Forces||Review the advantages and disadvantages of market forces and government intervention, then point out the illegal means of controlling supply as well as the legitimate and established economic tools for doing so.|
|Tax Incidence: Definition, Formula & Example||Explain the characteristics of tax incidence and the impact it has on demand, supply, sellers, buyers, and price.|
|Deadweight Welfare Loss & Marginal Diagrams||Scrutinize the term deadweight welfare loss in connection to environmental externalities, and use marginal diagrams in the analysis of this term.|
|Surplus in Economics: Definition & Overview||Point out the factors necessary to cause an economic surplus, establish the different kinds of economic surpluses, and define related terminology and concepts.|
1. The Concept of Ceteris Paribus in Economics
Learn what ceteris paribus means and why it is so important in economics. Find out how it helps us simplify and understand the relationship between different economic variables and forces. See some easy examples to help drive home its importance.
2. 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.
3. 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.
4. 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.
5. 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.
6. 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.
7. 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.
8. 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.
9. 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.
10. 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.
11. Tax Incidence: Definition, Formula & Example
In this lesson, we'll define the concept of tax incidence. We'll also review the factors needed to determine tax incidence as well as look at the formula for tax incidence and review an example of how it's determined.
12. Deadweight Welfare Loss & Marginal Diagrams
Deadweight loss is a drain on an economy. In this lesson, we will explain how deadweight losses occur and provide diagrams to describe this phenomenon.
13. Surplus in Economics: Definition & Overview
A surplus is often a good thing in economics. In this lesson, you'll learn what an economic surplus is and some related concepts. You'll also have a chance to reinforce your knowledge with a short quiz after the lesson.
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Other chapters within the AP Microeconomics: Exam Prep course
- Foundational Economic Concepts
- Economic Systems & Structures
- Elasticity of Markets in Microeconomics
- Microeconomics & Consumer Behavior
- Production & Costs in Economic Markets
- Firm Behavior & Monopoly in Microeconomics
- Factor Markets in Microeconomics
- Public Goods & Government in Microeconomics
- Public Policy, Government & Microeconomics
- AP Microeconomics Flashcards