Market Equilibrium Flashcards
1
Q
Equilibrium
A
When the demand from consumers for a product or service equals the supply from producers
2
Q
What is disequilibrium?
A
When there is market pressure on both prices and quantity to chage towards the direction of equilibrium
3
Q
What is surplus?
A
when the quantity is higher than the demand. producers drop prices to clear the market.
4
Q
What is a shortage?
A
If producers are willing to sell their products lower than the equilibrium, then demand will be greater than supply. Suppliers will increase prices to clear the market.
