Economics demand and supply

• Equilibrium


  A situation where there is no tendency to change in a market
• Market Equilibrium


  When supply is equal to demand
• Consumer Surplus


  The difference between the maximum price a consumer is willing to pay and the actual price paid
• Producer Surplus


  The difference between the minimum price a producer is willing to sell at and the actual price received
• Alternative Demand


  Substitutes on alternative good
• A rise in price of one product (alternative demand)


  Leads to an increase in demand and a rise in price of the substitute product
• Joint Demand


  Complement is in joint demand, meaning it is consumed with another product
• An increase in supply of one product (joint demand)


  Leads to an increase in demand for the complement
• Derived Demand


  Applies where something is required because it is needed for the production of other goods & services, e.g. labour and hotel service
• If there is an increase in demand for the hotel's services (derived demand)


  The demand for hotel workers will also increase
• Joint Supply


  Occurs when two goods are produced together but for different purposes, e.g. milk & dairy products
• An increase in demand for milkn( joint supply)

  Leads to an increase in supply and a fall in price of dairy products