Market

Question 1

What is the Definition of Market?

Answer 1

A place or situation where buyers and sellers meet to exchange goods and or services.

Question 2

What is Market Equilibrium?

Answer 2

The price where the quantity supplied equals the quantity demanded and the market is cleared. Consumer satisfaction and producer profits are maximized at this point.

Question 3

How can Goods or Services be Exchanged?

Answer 3

• Barter

- Money (Credit, Cash)

Question 4

What is a Market Place?

Answer 4

A physical environment where face to face transactions happen.

Question 5

What is a Market Situation?

Answer 5

Where exchanges of goods and services happen without physical face to face transactions. E.g. Internet (Trade Me), telephone call, postal service, texting.

Question 6

How to write an excellence explanation for movements on the curve.

Answer 6

At the price $10 (p1) the quantity supplied is 100 dvd’s per week (Qs). The quantity demanded is 400 per week (Qd).
There is a shortage of 300 dvds at p1.The price will rise from $10 (P1) to $25 (Pe). The quantity supplied rises from 100 (Qs) to 250 (Qe) dvds per week. The quantity falls from 100 (Qd) to 250 (Qe) dvds per week.

This is because of the law of supply and demand.

At Pe and Qe we are at market equilibrium. At this point the market has been cleared. Consumer satisfaction and producer profits are maximised.