1.2.6- Price Determination Flashcards
1
Q
Equilibrium price
A
‘At rest’ or ‘at a state of balance’. When demand= supply
2
Q
Excess demand
A
When quantity demanded exceeds quantity supplied
3
Q
Excess supply
A
When quantity supplied exceeds quantity demanded
4
Q
Market- clearing price
A
All products supplied to the market are bought and no buyers are left frustrated on their wishes to buy a good.
5
Q
On a supply and demand curve, if there excess demand where would it be?
A
Below the equilibrium point
6
Q
On a supply and demand curve, if there excess supply where would it be?
A
Above the equilibrium point
