2.5 The Interaction Of Markets Flashcards
Define ceteris paribus
Providing all other conditions remain the same
What is equilibrium price and quantity and quantity
This is when supply meets demand
At market equilibrium, price has no tendency to change, and is known as the market clearing price
How can you show market equilibrium on a diagram
Explain the excess demand in this diagram
Explain the excess supply in this diagram
When is a new market equilibrium established
When the demand or supply curves shift
Explain the impacts on a new market equilibrium in this diagram
Explain the impacts of this diagram
Give an example of the impact of changes in demand or supply in one market on a related market
How useful is supply and demand in analysing the market of commodities
Why might supply tend to be unstable in the market of commodities
How useful is supply and demand in analysing the market of housing
How useful is supply and demand in analysing the market of transport
What are the assumptions underlying the model of supply and demand
When is supply and demand useful in explaining real world problems
The model is useful for competitive markets, where there are many buyers and sellers