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Questions and Answers
Which of the following scenarios is similar to a 'surplus' in the video?
Which of the following scenarios is similar to a 'shortage' in the video?
What happens to the price of blue jeans when consumers find them less fashionable?
Why do suppliers increase the price of lettuce when there is a heavy rainfall?
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What happens to the price of computers when consumers start buying loads of cheap computers?
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Study Notes
Economic Concepts: Surplus and Shortage
- A 'surplus' occurs when supply exceeds demand, leading to excess goods in the market.
- A 'shortage' arises when demand surpasses supply, resulting in fewer goods available than consumers want.
Price Adjustments in Markets
- When blue jeans lose popularity and become less fashionable, consumer demand drops, leading to a decrease in their price.
- Suppliers raise the price of lettuce due to heavy rainfall, which can reduce supply (crop damage), thus increasing prices to balance the reduced availability.
- An influx of cheap computers into the market can drive prices down, as increased supply meets high consumer demand, potentially leading to lower average prices for all computers.
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Description
Test your knowledge on market equilibrium with this quiz! Assess your understanding of how supply and demand interact to determine the equilibrium price and quantity in a market.
