Key Takeaways
Lesson Description
Key Takeaways
• Market prices are determined by supply and demand.
• Changes in supply or demand shift equilibrium price and quantity.
• Elasticity measures responsiveness to price changes.
• Government intervention can create shortages and surpluses.
• Consumer and producer surplus measure market efficiency.
Must Know Equations
Elasticity = % Change in Quantity ÷ % Change in Price
Total Revenue = Price × Quantity
Must Know Vocabulary
Demand
Supply
Equilibrium
Price Ceiling
Price Floor
Consumer Surplus
Producer Surplus
Deadweight Loss
Price Elasticity of Demand
Price Elasticity of Supply
AP Exam Focus
• Draw Supply and Demand graphs.
• Calculate elasticity.
• Analyze government intervention.