Micro 7 Flashcards
1
Q
Market forces
A
Forces in free markets which act to change prices when there is excess supply or demand
2
Q
Price mechanism
A
The system of resource allocation based on the free market movement of prices, determined by the demand and supply curves
3
Q
Excess supply
A
When price is set too high so supply is greater than demand
4
Q
Excess demand
A
When price is set too low so demand is greater than supply
5
Q
Demand
A
The quantity of a good/service that consumers are able and willing to buy at a given price at a given time
6
Q
Supply
A
The quantty of a good/ service that firms are able and willing to sell at a given price at a given time
7
Q
Equilibrium
A
Where demand equals supply so there are no more market forces bringing about change to price or quantity demanded
