Equilibrium Position Flashcards
1
Q
What is Equilibrium?
A
Is were demand equals supply, at this point all products that are supplied onto the market will be purchased.
2
Q
What is it called when supply exceeds demand?
A
Surplus - Market is flooded
3
Q
What happens to price when there is surplus in market?
A
Price falls to get rid of excess product.
4
Q
What is it called when demand exceeds supply?
A
Shortage
5
Q
What happens to price when a market is in a shortage?
A
Prices will rise in order to meet equilibrium.
