Market Equilibrium Flashcards
Term 2, Year 10
1
Q
What is surplus?
A
If the quantity demanded of a good is smaller than quantity supplied, and there is excess supply.
Above market equilibrium.
2
Q
What is a shortage?
A
If the quantity demanded of a good is larger than the quantity supplied, and there is excess demand.
Below market equilibrium.
3
Q
What is market equilibrium?
A
When quantity demanded is equal to quantity supplied, and the forces of supply and demand are in balance.
4
Q
Where is market equilibrium determined?
A
The point where the demand curve intersects the supply curve.
5
Q
What happens at equilibrium price?
A
The quantity consumers are willing and able to buy is exactly equal to the quantity firms are willing and able to sell.
