Market equilibrium Flashcards
1. use diagrams to show how changes in demand and supply affect equilibrium price and quantity. 2. define, calculate and draw excess demand and excess supply. 3. explain why/how markets remove excess supply and excess demand
1
Q
What is equilibrium price?
A
the price at which supply and demand are equal. also known as market clearing price
2
Q
How do you calculate revenue?
A
Revenue = Price x Quantity Demanded
3
Q
How do you calculate profit?
A
Profit = Revenue - Cost
4
Q
How do you calculate cost?
A
Cost = Price of packet x Quantity demanded
