Econ Vocab 6 Flashcards
Market Equilibrium
a situation in which the quantity demandedof a good or service at a particular price is equal to the quantity supplied at that price.
Equilibrium price
the price at which the quantity of a product demanded by consumers and the quantity supplied by producers are equal
Surplus
the result of quantity supplied being greater than quantity demanded, usually because prices are too high
Shortage
the result of quantity demanded being greater than quantity supplied, usually because prices are too low
Disequilibrium
the process of finding equilibrium starts over again
Competitive pricing
when producers sell goods and services at prices that best balance the twin desires of making the highest profit and luring customers away from rival producers
incentive
a way to encourage people to take a certain action
price ceiling
an established maximum price that sellers may charge for a good or service
price floor
an established minimum price that buyers must pay for a good or service
minimum wage
the minimum legal price that an employer may pay a worker for one hour of work
Rationing
a system in which the government allocates goods and services using factors other than price
black market
goods and services are illegally bought and sold in violation of price controls or rationing
