LS10 - Price Determination Flashcards by Zayd Imran | Brainscape

Q

What is excess demand?

A

When demand is greater than supply

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Q

How is excess demand modelled on a graph?

A

Demand below equilibrium price

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Q

Why is excess demand bad?

A

Price of good is lower than the equilibrium price

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Q

What is excess supply?

A

When supply is greater than demand

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Q

How is excess supply modelled on a graph?

A

Supply above equilibrium price

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Q

Why is excess supply bad?

A

Price exceeds quantity demanded

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