1.2.3 markets Flashcards
1
Q
define markets
A
market is when supple and demand interact with each other
2
Q
define equilibrium?
A
a state in which markets supply and demand balance each other out resulting in stable prices.
3
Q
what is market disequilibrium?
A
it is when the price is changed and creates a surplus or a shortage.
4
Q
what happens in a free market?
A
it will gradually rebalance as firms and consumers adapt their behaviour
5
Q
how can you tell when there is an excess or a surplus in a market.
A
on the graph there will be dots that appear below the equilibrium to show an excess in demand
- when the dot is above the equilibrium it shows excess supply
6
Q
what happens when a factor other then price occurs
A
it leads to a shift in the supply of demand curve
