Equilibrium level of real national output 2.4.3

Question 1

equilibrium

Answer 1

this is when the AD and the AS line intersect

Question 2

what happens if the prices are high than the equilibrium point

Answer 2

there would be a tendency for them to fall because supply would be greater than demand and there will be lots of unsold goods and services.

Question 3

what happens if the prices are low than the equilibrium point

Answer 3

there would be a shortages and prices will start to rise in order to make sure that everyone could get what they are prepared to pay for.