Microeconomics - L8 Market Equilibrium Flashcards
1
Q
What is the market or price mechanism?
A
The price or market mechanism describes how the forces of demand and supply influence prices of goods and services, which then coordinates the way productive resources are allocated in the economy.
2
Q
How do the forces of demand and supply influence the prices of goods and services?
A
Through the market equilibrium.
3
Q
What is the market equilibrium?
A
The point at which the consumer and producer are both happy with price and quantity.
