Market Flashcards
market
a place or mechanism that facilitates the interaction of buyers and sellers, who come together for the purpose of trade.
trade
the exchange of goods and services for profit
market consists of
a potential buyer and seller. buyers demand goods/consume and sellers supply goods/produce
consumers and producers
these two economic agents within a market give rise to the market forces..
demand
supply
WRITE THIS IN GRAPHS
surplus
Qd < Qs
Qs > Qd
shortage
Qd > Qs
Qs < Qd
market quilibrium
a state of balance or rest within an economy from which there is no tendency to change. Qs and Qd are equal
market disequilibrium and equilibrium graph (EQUILBRIUM, SURPLUS AND SHORTAGE)
include A (demand) B(supply)
c(supply) d(demand)
E1
surplus- graph
when prices are above equilibrium
shortage
when prices are below equilbrium
contraction in demand
upwards arrow along curve
increase in price
expansion in demand
downwards arrow along curve
decrease in price
contarction in supply curve
decrease in price
downwards arrow
expansion along supply curve
upwards
increase in price
when simultaneous shifts in demand and supply curves are considered
the effect on price is only known after the shifts
whereas where one curve shift, price is usually known
