1.5 Demand And Supply: Equilibrium Flashcards
1
Q
What is Market Equilibrium ?
A
A state of balance between demand and supply.No excess demand or supply
2
Q
What is allocatively efficiency ?
A
Resources are efficiently allocated at the market equilibrium
3
Q
What is Total Welfare ?
A
economic benefit to all participants in a market, including consumers and producers
4
Q
What is consumer surplus ?
A
The difference between the price a consumer has to pay for a product and the price they’re willing to pay
5
Q
What is Producer Surplus ?
A
The extra profit a producer makes when they sell a product or service for more than the minimum price they were willing to accept
