10 Questions
What happens to the quantity supplied when there is a shortage in the market for coffee?
It increases.
What is the impact of a price above the equilibrium price in the market for coffee?
It results in a surplus.
How do sellers typically respond to a surplus in the market for coffee?
By decreasing prices.
What does a shortage indicate in the market for coffee?
Quantity demanded exceeds quantity supplied at the current price.
How does the quantity of coffee supplied change when the price of coffee begins to fall?
It decreases.
What happens to the supply curve in response to a reduction in price?
It remains unchanged
At what point does price stop falling and reach its equilibrium level?
When the demand and supply curves intersect
What defines a surplus in a market?
When the quantity demanded exceeds the quantity supplied at the current price
Why is there no surplus at the equilibrium price?
Because the market is not in equilibrium at that price
What does it mean when the demand and supply curves intersect?
The equilibrium price is reached
Learn about the model that combines demand and supply curves to explain the determination of price and quantity in a market. Understand how sellers respond to shortages and how equilibrium price is achieved.
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