law of demand - states that all else being equal, when the price of a good or service rises, demand falls
aggregate supply - the total quantity of goods and services that all sellers are willing and able to provide
at any price
aggregate demand - the total of all goods and services that all households, companies, and the
government are willing and able to buy at any price in a given period of time
market failure - Taxes can cause ________________________ by increasing the cost of goods and
services
externalities - the effects from supply and demand activity that affect people who are not the actual
buyers and sellers in a transaction
price discrimination - selling the same product to different consumers at different prices
price elasticity of demand - a measure of how much demand changes in response to changes in price
imperfect competition - takes place when there is a limited number of suppliers or buyers and one of
either can have a significant effect on price
public goods - goods and services that more than one person, household, or company can use at a time
law of supply and demand - states that the price of a product or service adjusts to bring supply and
demand into balance
price floor - the minimum-allowable price set by law that is above the market-clearing price
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