Class: Principles of Microeconomics

Topic: Supply and Demand

Key Points:
. Supply and demand are fundamental concepts in economics that
determine the prices of goods and services in a market economy.
. The law of demand states that, ceteris paribus, as the price of a good
or service increases, the quantity demanded decreases, and vice
versa.
. The law of supply states that, ceteris paribus, as the price of a good or
service increases, the quantity supplied increases, and vice versa.
. Equilibrium in the market occurs when the quantity demanded equals
the quantity supplied, resulting in an equilibrium price and quantity.
. Shifts in the demand or supply curve can lead to changes in
equilibrium price and quantity, illustrating the dynamic nature of
markets.
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