Lesson 20 pg. 62 - 64

Question 1

Define equilibrium

Answer 1

equilibrium - the point at which quantity demanded and quantity supplied are equal

Question 2

Describe shortage

Answer 2

storage - the situation in which the quantity demanded exceeds the quantity supplied at a given price

Question 3

Describe surplus

Answer 3

> if quantity supplied of a good is greater than the quantity demanded at a given price
*long-term shortages and surpluses are most often found in countries with command economies since suppliers lack the market signals available in free market economies