About This Chapter
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
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.
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.
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.
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. 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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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Other chapters within the TECEP Microeconomics: Study Guide & Test Prep course
- Basic Economic Concepts
- Consumers, Producers & Market Efficiency
- Taxation in Microeconomics
- International Trade in Microeconomics
- Public Sector Economics
- Costs in Economics
- Market Structures
- Profit & Capital Allocation
- Labor Market Economics
- Theories & Trends in Microeconomics
- TECEP Microeconomics Flashcards