Equlilibrium Flashcards
1
Q
Equilibrium
A
a state of equality or balance between market demand and supply
2
Q
Disequilibrium
A
prices where demand and supply are out of balance
3
Q
market clearing price
A
the price at which there is no excess demand or supply (the perfect price)
4
Q
The effect of an increase in demand on the equilibrium price
A
a rise in the equilibrium price and an expansion of market supply
5
Q
effect of decreasing demand on equilibrium price
A
a fall in equilibrium price and a contraction of market suppl
6
Q
effect of increasing supply on equilibrium price
A
a fall in equilibrium price and an expansion of demand
7
Q
effect of decreasing supply on equilibrium price
A
rise in equilibrium price and a contraction of demand
8
Q
ceteris paribus
A
all other things remain equal
