1. Quantity Demanded and Quantity Supplied

2. Quantity Demanded
The quantity demanded is a specific amount at a particular price.

3. A change in quantity demanded is caused by a change in the price of a good/service and is illustrated on a graph as a movement along the demand curve.
demand is a relationship that shows the quantity demanded at each price.

5. Quantity Supplied
The quantity supplied is a specific amount at a particular price.

6. A change in quantity supplied is caused by a change in the price of a good/service and is illustrated on a graph as a movement along the supply curve.
supply is a relationship that shows the quantity supplied at each price.

8. Price Ceilings and Price Floors

9. Price Ceilings
Price Ceilings and Floors: When the government intervenes in a market to prevent the laws of supply and demand from determining price

10. Price Ceilings
What are price ceilings? A price ceiling is a legally established maximum price; the highest price that can be charged for a particular good or service
Where do they come from? Governments enact price ceilings when they fear that the price might be higher than they desire it to be.

12. Example of a price ceiling:
Rent-control laws -- These laws limit the increase in rents from year to year

13. What happens when a price ceiling is LOWER than the market (equilibrium) price? The quantity demanded in the market (which is encouraged by the lower price) exceeds quantity supplied…also known as a shortage.

14. Unintended Consequence of Price Ceilings:
Price ceilings create a situation in which some of those who demand the good won't be able to buy it at all

15. Price Floors
What are price floors? A legally established minimum price; the lowest price that can be charged for a particular good or service
Where does it come from? Governments enact price floors when they fear that the price might be lower than they desire it to be.

17. Example of a price floor:
The minimum wage

18. What happens when a price floor is HIGHER than the market (equilibrium) price? The quantity supplied in the market (which is encouraged by the higher price) exceeds quantity demanded…also known as a surplus.