Equilibrium Flashcards
The price at which the quantity supplied of a good, service, or resource equals the quantity demanded
equilibrium price
The quantity traded when the quantity supplied of a good, service, or resource equals its quantity demanded
equilibrium quantity
A situation in which the quantity demanded is greater than the quantity supplied at the current market price
shortage = Qs - Qd < 0
A situation in which the quantity supplied is greater than the quantity demanded at the current market price
surplus = Qs - Qd > 0
If market price is above equilibrium there will be a
surplus
If market price is below equilibrium there will be a
shortage
A characteristic of the demand for a good, service, or resource other than its own price.
nonprice determinant (demand)
A change in the quantity of a good, service, or resource demanded at every price.
Change (shift) in demand
A maximum legal price at which a good, service, or resource can be sold
price ceiling
A maximum legal price that is set above the existing equilibrium price.
non-binding price ceiling
A maximum legal price that is set below the existing equilibrium price.
binding price ceiling
A minimum legal price that is set below the existing equilibrium price.
non binding price floor
A minimum legal price that is set above the existing equilibrium
binding price floor
The lowest wage firms can legally pay employees in the labor market
minimum wage
result of increased scarcity and inefficiency.
disequilibrium
When
