Chapter 4 - How A Competitive Market Functions Flashcards
0
Q
Define Disequilibrium
A
A situation within the market where does not equal demand.
1
Q
Define Equilibrium
A
The price in which demand is equal to supply and there is np tendency for change.
2
Q
Define Excess Supply
A
When supply at a particular price is greater than demand; this should signal to producers to lower prices
3
Q
DefineMarket-Clearing Price
A
The price at which all goods that are supplied will be demanded.
4
Q
Define Excess Demand
A
When demand is greater than supply at a given price.
5
Q
Define Maximum Price
A
A price ceiling above which the price of a good or service is not allowed to increase.
6
Q
Define Minimum Price
A
A price floor below which the price of a good or service is not allowed to decrease
