Supply and demand

demandsupplylaw of supply and demanddemand and supplysupply-and-demandseller's to a buyer's marketbuyersconsumer demandconsumer demand curvesDemand-side
In microeconomics, supply and demand is an economic model of price determination in a market.wikipedia
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Economic equilibrium

equilibriumequilibrium pricemarket equilibrium
It postulates that, holding all else equal, in a competitive market, the unit price for a particular good, or other traded item such as labor or liquid financial assets, will vary until it settles at a point where the quantity demanded (at the current price) will equal the quantity supplied (at the current price), resulting in an economic equilibrium for price and quantity transacted.
In economics, economic equilibrium is a situation in which economic forces such as supply and demand are balanced and in the absence of external influences the (equilibrium) values of economic variables will not change.

Market (economics)

marketmarketsmarket forces
In microeconomics, supply and demand is an economic model of price determination in a market.
Market participants consist of all the buyers and sellers of a good who influence its price, which is a major topic of study of economics and has given rise to several theories and models concerning the basic market forces of supply and demand.

Alfred Marshall

MarshallMarshallianAlfred Marshall,
Although it is normal to regard the quantity demanded and the quantity supplied as functions of the price of the goods, the standard graphical representation, usually attributed to Alfred Marshall, has price on the vertical axis and quantity on the horizontal axis. Léon Walras first formalized the idea of a one-period economic equilibrium of the general economic system, but it was French economist Antoine Augustin Cournot and English political economist Alfred Marshall who developed tractable models to analyze an economic system.
It brings the ideas of supply and demand, marginal utility, and costs of production into a coherent whole.

Comparative statics

comparative staticcomparative-staticcomparative static derivatives
Comparative statics of such a shift traces the effects from the initial equilibrium to the new equilibrium.
Comparative statics is commonly used to study changes in supply and demand when analyzing a single market, and to study changes in monetary or fiscal policy when analyzing the whole economy.

Marginal utility

marginal benefitdiminishing marginal utilitymarginal revolution
Just as the supply curve parallels the marginal cost curve, demand curves are parallel marginal utility.
In this way it is useful for explaining supply and demand, as well as essential aspects of models of imperfect competition.

General equilibrium theory

general equilibriumgeneral-equilibriumgeneral equilibrium model
This makes analysis much simpler than in a general equilibrium model which includes an entire economy.
The Marshallian theory of supply and demand is an example of partial equilibrium analysis.

Labour economics

laborlabor economicslabor market
The model is commonly applied to wages, in the market for labor.
Neoclassical economists view the labour market as similar to other markets in that the forces of supply and demand jointly determine price (in this case the wage rate) and quantity (in this case the number of people employed).

Market economy

market economiesfree market economymarket
Demand and supply have also been generalized to explain macroeconomic variables in a market economy, including the quantity of total output and the general price level.
A market economy is an economic system in which the decisions regarding investment, production and distribution are guided by the price signals created by the forces of supply and demand.

Pricing

price comparisonPriceprice determination
In microeconomics, supply and demand is an economic model of price determination in a market.
It uses an automated algorithm to increase prices to "surge price" levels, responding rapidly to changes of supply and demand in the market.

Antoine Augustin Cournot

CournotAugustin CournotAntoine Augustine Cournot
Léon Walras first formalized the idea of a one-period economic equilibrium of the general economic system, but it was French economist Antoine Augustin Cournot and English political economist Alfred Marshall who developed tractable models to analyze an economic system.
He derived the first formula for the rule of supply and demand as a function of price and in fact was the first to draw supply and demand curves on a graph, anticipating the work of Alfred Marshall by roughly thirty years.

Wage

wageswage ratelabor costs
The model is commonly applied to wages, in the market for labor.
Depending on the structure and traditions of different economies around the world, wage rates will be influenced by market forces (supply and demand), legislation, and tradition.

Léon Walras

WalrasLeon WalrasWalrasian
Léon Walras first formalized the idea of a one-period economic equilibrium of the general economic system, but it was French economist Antoine Augustin Cournot and English political economist Alfred Marshall who developed tractable models to analyze an economic system.
The problem that Walras set out to solve was one presented by A. A. Cournot, that even though it could be demonstrated that prices would equate supply and demand to clear individual markets, it was unclear that an equilibrium existed for all markets simultaneously.

Interest

simple interestrate of interestinterest rates
In both classical and Keynesian economics, the money market is analyzed as a supply-and-demand system with interest rates being the price.
In a free market economy, interest rates are subject to the law of supply and demand of the money supply, and one explanation of the tendency of interest rates to be generally greater than zero is the scarcity of loanable funds.

Perfect competition

perfectly competitiveperfect marketimperfect market
It postulates that, holding all else equal, in a competitive market, the unit price for a particular good, or other traded item such as labor or liquid financial assets, will vary until it settles at a point where the quantity demanded (at the current price) will equal the quantity supplied (at the current price), resulting in an economic equilibrium for price and quantity transacted.

Complementary good

complementary goodscomplementscomplementary
goods that buyers are willing and able to purchase at various prices, assuming constant all other determinants of demand, such as income, tastes and preferences, the price of substitute goods, and the price of complementary goods.
The supply and demand for cars is represented by the figure at the right with the initial demand D1.

Exogenous and endogenous variables

exogenousexogenous variableendogenous
Typically, data on exogenous variables (that is, variables other than price and quantity, both of which are endogenous variables) are needed to perform such an estimation.
In the simple supply and demand model, a change in consumer tastes is unexplained by the model and imposes an exogenous change in demand that leads to a change in the endogenous equilibrium price and the endogenous equilibrium quantity transacted.

Microeconomics

microeconomicmicroeconomic theoryprice theory
In microeconomics, supply and demand is an economic model of price determination in a market. Compared to microeconomic uses of demand and supply, different (and more controversial) theoretical considerations apply to such macroeconomic counterparts as aggregate demand and aggregate supply.
The theory of supply and demand usually assumes that markets are perfectly competitive.

Econometrics

econometriceconometricianeconometric analysis
This can be done with simultaneous-equation methods of estimation in econometrics.
Economics often analyses systems of equations and inequalities, such as supply and demand hypothesized to be in equilibrium.

Giffen good

Two different types of goods with upward-sloping demand curves are Giffen goods (an inferior but staple good) and Veblen goods (goods made more fashionable by a higher price).
Rosen showed that the phenomenon could be explained by a normal demand model.

Parameter identification problem

identificationidentification problemidentified
The Parameter identification problem is a common issue in "structural estimation."
Consider a linear model for the supply and demand of some specific good.

Demand curve

demand functiondemandDemand Curves
A demand schedule, depicted graphically as a demand curve, represents the amount of certain

Law of demand

demand theoryif the price was right
According to the law of demand, the demand curve is always downward-sloping, meaning that as price decreases, consumers will buy more of the good.

Reduced form

reduced-form
An alternative to "structural estimation" is reduced-form estimation, which regresses each of the endogenous variables on the respective exogenous variables.
If we assume that demand is influenced not only by price, but also by an exogenous variable, Z, we can consider the structural supply and demand model

Consumer choice

consumer theoryincome effectconsumer choice theory
The theory of consumer choice is the branch of microeconomics that relates preferences to consumption expenditures and to consumer demand curves.

Aggregate demand

disaggregationKeynesian formulaaggregate
Compared to microeconomic uses of demand and supply, different (and more controversial) theoretical considerations apply to such macroeconomic counterparts as aggregate demand and aggregate supply.
Sometimes, especially in textbooks, "aggregate demand" refers to an entire demand curve that looks like that in a typical Marshallian supply and demand diagram.