Copyright

Ch 2: Supply & Demand in Microeconomics

About This Chapter

Study supply and demand in microeconomics with the help of this chapter. We want to help you score the highest you can on your microeconomics test, so we have designed our lessons to help you memorize all the most important terms, definitions, formulas, and key concepts.

Supply & Demand in Microeconomics - Chapter Summary

In the field of microeconomics, supply and demand is one of the most fundamental principles. This chapter covers the most important supply and demand concepts that you will need to know, including market equilibrium, supply and demand changes, and price, income, and cross-price elasticity.

Whether you need a fast recap of this topic, or if you need to learn everything from the ground up, our lessons have been designed to help learners of all levels. Start at the beginning and go through the lessons one by one, or skip around and go to the lessons you need to review the most. After you have completed the chapter, you will be ready to:

  • Define and discuss the advantages and characteristics of the market system
  • Describe how microeconomic shifts occur with supply and demand curves
  • Establish techniques for manipulating supply and demand through market forces
  • Differentiate between inelastic and derived demand in business markets
  • Identify how demand can be impacted by price elasticity
  • Compare and contrast cross price elasticity, income elasticity, and price elasticity
  • Figure out how price floors and price ceilings impact microeconomics
  • List and describe ways the government tries to control supply or has non-regulatory influences on business
  • Elaborate on the impact of monetary policy and fiscal policy on the economy
  • Go over the history of governmental deregulation and regulation of the economy

15 Lessons in Chapter 2: Supply & Demand in Microeconomics
Test your knowledge with a 30-question chapter practice test
The Market System in Economics: Definition, Characteristics & Advantages

1. The Market System in Economics: Definition, Characteristics & Advantages

There are areas of the world where the government controls everything. Others give the people freedom to choose. The type of economy is a major part of how a society runs. This lesson discusses a market economy and how it functions.

Market Equilibrium from a Microeconomics Perspective

2. 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.

Microeconomic Shifts in Supply and Demand Curves

3. 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.

Causes of Supply and Demand Changes in Microeconomics

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.

Using Market Forces to Manipulate Supply and Demand

5. 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.

Derived vs. Inelastic Demand in Business Markets

6. 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

7. 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

8. 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

9. 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

10. 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.

Price Ceilings and Price Floors in Microeconomics

11. 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

12. 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.

Government's Non-Regulatory Influence on Business

13. Government's Non-Regulatory Influence on Business

The government's non-regulatory influence on business can be just as effective as regulatory methods. In this lesson, you will learn numerous ways government can impact companies' productivity and profitability.

How Fiscal Policy and Monetary Policy Affect the Economy

14. How Fiscal Policy and Monetary Policy Affect the Economy

Governments often intervene in their economies in an attempt to maintain economic stability. In this lesson, you'll learn about fiscal and monetary policies, including what effect they can have on a national economy. A short quiz follows.

Governmental Regulation & Deregulation of the Economy

15. Governmental Regulation & Deregulation of the Economy

Government regulations affect all aspects of the economy. However, some sectors are subject to specific regulations due to their importance. This lesson explores the purposes and methods of economic regulation and deregulation.

Chapter Practice Exam
Test your knowledge of this chapter with a 30 question practice chapter exam.
Not Taken
Practice Final Exam
Test your knowledge of the entire course with a 50 question practice final exam.
Not Taken

Earning College Credit

Did you know… We have over 200 college courses that prepare you to earn credit by exam that is accepted by over 1,500 colleges and universities. You can test out of the first two years of college and save thousands off your degree. Anyone can earn credit-by-exam regardless of age or education level.

To learn more, visit our Earning Credit Page

Transferring credit to the school of your choice

Not sure what college you want to attend yet? Study.com has thousands of articles about every imaginable degree, area of study and career path that can help you find the school that's right for you.

Support