Foundations of Demand, Supply, and Market Efficiency

Define demand and supply and state the law of demand and the law of supply.

Distinguish between movements along a demand or supply curve and shifts of the curve.

Identify the key non-price factors that shift demand and supply curves.

Determine equilibrium price and quantity from demand and supply schedules or graphs.

Analyze the effects of simultaneous shifts in demand and supply on equilibrium price and quantity.

Define consumer surplus, producer surplus, and total surplus, and identify them on a graph.

Explain the conditions for allocative efficiency and its relationship to maximizing total surplus.

Analyze the effects of price ceilings and price floors on market outcomes and welfare.