Equilibrium Price Flashcards
1
Q
Surplus/Excess supply
A
The qty. supplied is higher than qty. demanded
2
Q
Shortage/Excess demand
A
The qty. demanded is higher than qty. supplied
3
Q
Equilibrium Price
A
The price level where quantity demanded = quantity supplied
4
Q
Price Gouging
A
The practice of increasing the price of goods & services to a much higher level than what is considered reasonable or fair by some
5
Q
Lowering price during surplus –> ???
A
attracts customers
6
Q
Increasing price during shortage –> ???
A
makes profit
