Podcast
Questions and Answers
Disequilibrium occurs when?
Disequilibrium occurs when?
Equilibrium is defined when?
Equilibrium is defined when?
What needs to happen to the price indicated by p2 on the graph in order to achieve equilibrium?
What needs to happen to the price indicated by p2 on the graph in order to achieve equilibrium?
On a graph, an equilibrium point is where?
On a graph, an equilibrium point is where?
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If the quantity supplied is greater than the quantity demanded, what must happen to the price in order to reach equilibrium?
If the quantity supplied is greater than the quantity demanded, what must happen to the price in order to reach equilibrium?
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How many goods must be supplied to achieve equilibrium?
How many goods must be supplied to achieve equilibrium?
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A limited amount of goods available means that excess _________ is occurring.
A limited amount of goods available means that excess _________ is occurring.
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What happens when the quantity of a good supplied at a given price is greater than the quantity demanded?
What happens when the quantity of a good supplied at a given price is greater than the quantity demanded?
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In order to achieve equilibrium, what else must be included on the graph?
In order to achieve equilibrium, what else must be included on the graph?
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A car dealer who does not have enough customers for a supply of new cars faces?
A car dealer who does not have enough customers for a supply of new cars faces?
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What does 'Q' represent on the graph?
What does 'Q' represent on the graph?
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Which occurs during market equilibrium? (Check all that apply)
Which occurs during market equilibrium? (Check all that apply)
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A limited amount of goods available means that excess ________ is occurring.
A limited amount of goods available means that excess ________ is occurring.
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Which explains the connection between the law of demand and excess demand?
Which explains the connection between the law of demand and excess demand?
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What does 'P' represent on the graph?
What does 'P' represent on the graph?
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Study Notes
Market Price Concepts
- Disequilibrium occurs when quantity supplied does not equal quantity demanded, indicating an imbalance in the market.
- Equilibrium is established when supply and demand intersect, reflecting a stable market condition.
Market Dynamics
- Excess supply leads to a decrease in price to achieve equilibrium; prices need adjustment to match demand.
- An equilibrium point on a graph is defined as the intersection of the supply curve and the demand curve.
Supply and Demand Interactions
- When quantity supplied exceeds quantity demanded, the price of goods must be decreased to reach equilibrium.
- A limited supply of goods suggests the presence of excess demand, where more consumers want goods than are available.
Equilibrium in Graphs
- In a graph depicting equilibrium, "Q" represents the quantity supplied at the equilibrium point.
- The y-axis typically shows "P," which indicates the price at the equilibrium point where supply meets demand.
Characteristics of Market Equilibrium
- During market equilibrium, supply and demand meet at a particular price and quantity.
- Notable characteristics of excess supply include stable prices and opportunities for increased production when demand is insufficient.
Demand Law Connection
- The law of demand establishes that lower prices lead to higher quantities demanded; this principle is crucial during periods of excess demand.
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Description
Test your understanding of key concepts related to market price determination, including equilibrium and disequilibrium. This quiz consists of flashcards aimed at reinforcing your knowledge in economics.
