How markets work

4. The quantity of a good/service that producers are willing and able to provide at a given price and time.
5. When supply exceeds demand, driving prices down.
10. Demand for a good that is a consequence of the demand for something else (e.g., labor for cars).
13. A state of balance where quantity demanded equals quantity supplied.
15. Higher prices ration scarce resources and incentivize increased production.
16. Measures the responsiveness of quantity demanded to a change in price.

1. The price where there is no surplus or shortage.
2. Demand for a good that has multiple uses (e.g., milk for cheese or butter).
3. When one party has more information than the other.
6. Payments by the government to firms to encourage production, shifting supply right.
7. Taxes on expenditure (e.g., VAT) that increase production costs and shift supply left.
8. Measures responsiveness of demand for one good to a change in the price of another.
9. When demand exceeds supply, driving prices up.
11. The quantity of a good/service that consumers are willing and able to buy at a given price and time.
12. Measures responsiveness of demand to changes in income.
14. A platform where buyers and sellers come together to determine prices and allocate resources.