Supply and Demand — Practice Questions

Supply and DemandEconomics Fundamentals — The two forces that set the price of almost everything.Supply and demand are the two forces that set the price of almost everything. Where they meet is the price that clears the market.

Law of demand: as price rises, people generally buy less.

Law of supply: as price rises, producers generally offer more.

Equilibrium: The price where the quantity buyers want equals the quantity sellers offer.Shifts move the whole curveA change in the good's own price moves you along a curve. A change in income, tastes, or related goods shifts the entire curve, creating a new equilibrium.A price ceiling set below equilibrium tends to cause shortages. A price floor set above it tends to cause surpluses.15 practice questions with explanations. Free, and no account is needed to start.