Macroeconomics, definitions and terms used

Demand- a schedule or a graph showing the relationship between the price of a product and the amount consumers are willing and able to buy, ceteris paribus Law of Demand- says there is a negative inverse relationship between the price and quantity demanded, people will be willing and able to buy more if the product gets cheaper. As price falls, quantity demanded rises, and as price rises, quantity demanded falls Demand Schedule- shows the relationship …

…firms go outta business or migrate to more prosperous industries where normal or economic profits prevail. Consumer Sovereignty- works through consumers demand, and consumer demand is crucial in determining the types and quantities if goods produced. Dollar votes- consumers register their wants via the demand side of the product market. Increase in consumer demand = enough dollar votes are cast to provide and economic profit à industry expands, as will output of the product