Market Equilibrium for Supply and Demand

Question 1

market equilibrium

Answer 1

refers tot eh situation when the supply exactly meets demand. it is the point at which consumer desires and business desires align, and it is represented on the graph by the point at which the supply curve and the demand curve intersect

Question 2

remember this…

Answer 2

supply curves slopes upward and demand curves slope downwards

Question 3

note

Answer 3

• market disequilibrium occurs when consumer and business interests do not align
• when businesses try to capitalize on a high price by increasing the supply, they may end up with excess supply
• if there is an excess supply, businesses may drop prices to sell the product which can lead to excess demand
• although supply and demand shift, they will usually return to equilibrium

Question 4

as the price of a good increases, what happens to its supply in the marketplace?

Answer 4

it increases

Question 5

why is market equilibrium unique and important

Answer 5

only point where supply & demand cross

Question 6

significance of intersection

Answer 6

where consumers and producers agree on price and quantity

Question 7

result of consumers buying less of a product

Answer 7

excess supply

Question 8

excess supply

Answer 8

surplus

Question 9

excess demand

Answer 9

shortage

Question 10

NOT cause market disequilibrium

Answer 10

consumers and producers agree on both price and quantity

Question 11

effect of a mandate by the government to sell goods at prices above market equilibrium

Answer 11

surplus of goods

Question 12

problem of an economic shortage

Answer 12

increases prices to market equilibrium

Question 13

what do businesses need to do in order to get rid of the excess

Answer 13

decrease price