Market Equilibrium Flashcards
Demerit good
A good or service that is deemed to be of detriment to society
Market Demand
The horizontal summation of individual consumers’ demand. Total demand in a group of consumers (e.g. a city).
Market Supply
The horizontal summation of individual producers’ supply.Total supply in a group of producers (e.g. a city).
Market Equilibrium
When the quantity supplied in a market equals the quantity demanded.
Maximum Price (Price Ceiling)
A government restriction meaning a good or service cannot be sold for more than the stated amount.
Merit Good
A good or service that is deemed to be of benefit to society
Minimum Price (Price Floor)
A government restriction meaning a good or service cannot be sold for less than the stated amount.
Shortage
When quantity demanded is greater than quantity supplied.
Surplus
When quantity supplied is greater than quantity demanded.
