Demand, supply and market equilibrium

Learning objectives

State the law of demand, explain it using the income and substitution effects, and distinguish a movement along the demand curve from a shift caused by income, tastes, prices of related goods, expectations or the number of buyers

State the law of supply and distinguish a movement along the supply curve from a shift caused by input costs, technology, taxes and subsidies, expectations or the number of sellers

Find equilibrium price and quantity where the curves intersect and explain how a shortage or a surplus is eliminated by price adjustment

Predict the effect of a single shift in demand or supply on equilibrium price and quantity, and identify which variable is indeterminate when both curves shift at once