Market Equilibrium

Question 1

When is a market in equilibrium

Answer 1

When supply equals demand

Question 2

Market forces are

Answer 2

The free interaction of supply and demand

Question 3

When a market is at equilibrium

Answer 3

Price and output are stable

Which means

There is a balance in the market

All products that are presented for sale are sold and the market is cleared.

Question 4

Disequilibrium

Answer 4

When supply and demand aren’t equal

When there is excess supply or excess demand

Question 5

Excess demand and supply

Answer 5

Wont exist in a free market for long

Question 6

Excess supply

Answer 6

Is when quantity supplied to a market is greater that the quantity demanded..

Excess supply will force the price down. Supply to contract and demand to extend until equilibrium was reached.

Question 7

Excess demand

Answer 7

Is when demand for a good/service is greater than its supply.

Excess demand causes the price to be forced up.

Therefore demand will contract and supply will extend until equilibrium is reached.

Question 8

Obviously shift in demand and supply curves will

Answer 8

Change the market equilibrium

Question 9

Elasticity will affect the

Answer 9

Point of new equilibrium

Question 10

Point of new equilibrium

Price inelastic supply or demand

Shifts in demand supply curve has greater impact on

Answer 10

Price

Question 11

Point of new equilibrium

Price elastic supply or demand

Shifts in demand supply curve has greater impact on

Answer 11

Quantity