Market Equlibrium Flashcards
1
Q
Market Equilibrium
A
The state of equality between demand and supply, there is no excess demand or supply
2
Q
Market Disequilibrium
A
Prices where demand and supply are out of balance
3
Q
What does an Outward shift of market demand lead to?
A
Leads to a rise in equilibrium price and an expansion of market supply
4
Q
Reason for an upward sloping supply curve
A
Price and supply have a positive relationship, because firms are profit maximisers and they will supply more as it becomes more profitable
