1.2.3 Markets Flashcards
1
Q
Markets - Interaction of Supply and Demand
A
Equilibrium = balance between supply and demand
Disruption - forces of S+D respond until new equilibrium is established
In some markets equilibrium changes many times per second as S+D try to find point of balance
SHORTAGE - Demand exceeds supply
SURPLUS - Supply exceeds demand
Disequilibrium in the market = excess in S+D
2
Q
Equilibrium market prices - an increase in demand
A
An outward shift in demand = rise in equilibrium price + expansion of suuply
3
Q
Equilibrium market prices an increase in supply
A
An outward shift in market supply = fall in equilibrium price and expansion of market
