1.2.3 Markets

Question 1

What is Market equilibrium?

Answer 1

Market equilibrium is that point at which demand is equal to supply i.e. where the supply and demand curve cross

Question 2

What is Market equilibrium also known as?

Answer 2

It is also known as the market clearing price as all products will be sold at this price

Question 3

Any change in demand or supply will lead to a ____ ?

Answer 3

new equilibrium price

Question 4

What do Market forces do?

Answer 4

Market forces are always pushing prices towards market equilibrium

Question 5

Which of the following statements best defines market equilibrium?

A) Prices are kept low leading to consumer satisfaction.
B) Quantity demanded in the market matches supply.
C) The market is saturated by cheap supplies.
D) More suppliers can enter the market to maximise profits

Answer 5

B

Question 6

A change in price will lead to a ______?

Answer 6

<b>Movement</b> along the supply or demand curve

Question 7

A change in any other factor will lead to a ___?

Answer 7

<b>shift</b> in the demand or supply curve