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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 'surplus' in the video?
Which of the following scenarios is similar to a 'shortage' 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?
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?
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?
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.
