2.5

Question 1

define surplus

Answer 1

quantity supplied is greater than quantity demanded at a given price

Question 2

define shortage

Answer 2

quantity demanded is greater than quantity supplied at a given price

Question 3

define market equilibrium

Answer 3

Market equilibrium occurs when the quantity demanded of a product is equal to the quantity supplied of the product, there are no shortages or surpluses.

Question 4

define equilibrium price

Answer 4

Equilibrium price is the price at which the demand curve for a product intersects the supply curve for the product. The market is therefore cleared of any excess demand or supply.

Question 5

define market disequilibrium

Answer 5

Market disequilibrium occurs when the quantity demanded of a product is unequal to the quantity supplied of the product, there are shortages or surpluses.

Question 6

define excess in demand

Answer 6

Excess demand refers to a situation where the market price is below the equilibrium price, thus creating a shortage in the market.

Question 7

define excess supply

Answer 7

Excess supply refers to a situation where the market price is above the equilibrium price, thus creating a surplus in the market.