Unit 8- Market Equilibrium Flashcards
On a Price / Quantity Graph, the supply curve slopes…
Upward
Any price higher than equilibrium price creates
a surplus
When a surplus occurs, what is likely to happen to the market price?
it is likely to fall to eliminate the surplus.
Any price lower than equilibrium price creates
a shortage
When a shortage occurs, what is likely to happen to the market price?
it is likely to raise, to accommodate the shortage
A change in technology would have what effect on the supply curve?
it would shift entirely to the right
An increase in supply would have what effect on the equilibrium price?
it would lower the equilibrium price
A positive buyers preference would have what effect on the demand curve?
it would shift entirely to the right
An increase in demand would have what effect on thee equilibrium price?
it would raise the equilibrium price
On a Price / Quantity Graph, the demand curve slops…
Downward
The intersection of supply and demand on the Price / Quantity Graph is called…
Market equilibrium
A shortage of quantity supplied has what effect on price?
Upward pressure, a possible price increase.
