equilibrium Flashcards
1
Q
equilibrium price
A
the price at which quantity supplied equals quantity demanded
buyers and sellers are satisfied
2
Q
shortage
A
the price of a good or service is below equilibrium price
quantity demanded at that given price is greater than quantity supplied
3
Q
surplus
A
market price is above the equilibrium price
price at the quantity supplied is higher than the consumer is willing to spend
4
Q
what happens when there is a surplus
A
producers lower the price
5
Q
what happens when there is a shortage
A
producers raise the price
6
Q
price floor
A
govt places a set minimum that prices need to be at
unable to go to equilibrium price bc it’s not ideal for economy
7
Q
price ceiling
A
places cap on prices can’t increase price to equilibrium price
