1.1.3 market equilibrium Flashcards
1
Q
Market clearing price
A
When amount supplied matches the amount demanded
2
Q
Equilibrium price
A
Price of a good where supply = demand (market equilibrium)
3
Q
Equilibrium quantity
A
Quantity of a good where supply = demand (market equilibrium)
4
Q
Shortage (excess demand)
A
Where demand is greater than supply
5
Q
Surplus (excess supply)
A
Where supply is greater than demand
6
Q
Market forces
A
Actions of buyers and sellers that cause the prices of goods/services to change (remove excess demand and supply)
- changing prices
- adjusting supply
