Chapter 12 Flashcards
1
Q
What is excess demand?
A
When the demand for a product exceeds the supply so, there is a shortage of the product in the market (the price is too low)
2
Q
What is excess supply?
A
When the supply of a product exceeds the demand so, there is a surplus of the product in the market (the price is too high)
3
Q
What is an equilibrium price?
A
When the supply and the demand of the product are in equilibrium. At this price all products are sold.
