The Market

Question 1

What is the Definition of a Market?

Answer 1

A place or situation where buyers + Sellers meet to exchange goods and/or services.

Question 2

What is Market Equilibrium?

Answer 2

The price where the quantity supplied equals the quantity demanded and the market is cleared. Consumer satisfaction and producer profits are maximised at this point.

Question 3

How can Goods or Services be Exchanged?

Answer 3

• Barter

- Money, Credit, Cash

Question 4

What is a Marketplace?

Answer 4

A physical where face to face transactions happen.

Question 5

What is a Market Situation?

Answer 5

Where exchange of goods + services happen without physical face to face transactions?

• Internet eg. trade me
• Telephone Call
• Postal Service
• Texting

Question 6

How to Write an Excellence Explanation for movements on a curve.

Answer 6

At the price of $10(P1) the quantity supplied is 100 DVDs per week(QS). The quantity demanded is 400 DVDs per week(QD). There is a shortage of 300 DVDs at P1. The price will rise from $10(P1) to $25(Pe). The quantity supplied rises from 100(Qs) to 250(Qe) DVDs per week. The quantity demanded falls from 400(Qd) to 250(Qe) DVDs per week. This follows the laws of supply and demand. At Pe and Qe we are at market Equilibrium. At this point the market for DVDs per week has been cleared. Consumer satisfaction and Producer profits are maximised