market equilibrium Flashcards
what is a market equilibrium and what does it show
it is the point where the demand is equal to supply. the equilibrium price is/should be the market price (as other prices may cause excess demand or excess supply which cause issues due to scarcity). equilibrium is used to determine the price after a shift in the demand and/or supply curves.
what do shifts in the demand and supply curves show
shift in D curve in equilibriums show an change in demand, shifts in S curves show a change in supply. these changes could be due to any factor that affects the consumer/producer (price of the good doesnt remain constant). the price change is what is found out using equilibrium diagrams when the change in demand and supply are given. (refer own note in file)
