Week 7 Flashcards
1
Q
Equilibrium
A
The price at which demand & supply meet (the market clearing price)
2
Q
Equilibrium price
A
Price balancing the quantity of goods demanded & supplied
3
Q
Equilibrium quantity
A
The quantity of goods supplied & demanded at equilibrium price
4
Q
Surplus
A
When quantity supplied of a product exceeds quantity demanded > price above market equilibrium
To fix surplus prices, fall which expand demand & contract supply.
5
Q
Shortage
A
When quantity demanded of a product exceeds quantity supplied > price below market equilibrium
To fix the shortage, prices rise, which contracts demand & expands supply.
6
Q
Law of supply & demand
A
Prices of any good adjusted to bring quantity supplied & demanded for that good into balance
