14. Market Price Equilibrium

Question 1

What is Equilibrium?

Answer 1

the balance between the market forces of supply and demand.
the point where quantity demanded is equal to quantity supplied and can be seen on a graph or in a schedule
There is no surplus or shortage

Question 2

Where will excess demand occur on an Equilibrium graph?

Answer 2

Any price below equilibrium where Qs is less than Qd

Question 3

Where will excess supply occur on an Equilibrium graph?

Answer 3

Any price above equilibrium where Qs is greater than Qd