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Questions and Answers
Supply and demand coordinate to determine prices by working:
Supply and demand coordinate to determine prices by working:
Both excess supply and excess demand are a result of:
Both excess supply and excess demand are a result of:
The graph shows excess supply. Which needs to happen to the price indicated by p2 on the graph in order to achieve equilibrium?
The graph shows excess supply. Which 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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On a graph, a(n) _____ shows the demand portion of equilibrium.
On a graph, a(n) _____ shows the demand portion of equilibrium.
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Equilibrium is defined when:
Equilibrium is defined when:
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The graph shows excess demand. Which explains why the price indicated by p2 on the graph is lower than the equilibrium price?
The graph shows excess demand. Which explains why the price indicated by p2 on the graph is lower than the equilibrium price?
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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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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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Study Notes
Market Price Determination
- Prices are determined through the coordination of supply and demand, working together effectively.
Disequilibrium Causes
- Excess supply and excess demand arise from disequilibrium rather than equilibrium conditions.
Price Adjustment
- To reach equilibrium from excess supply, the price must be decreased.
Equilibrium Point
- An equilibrium point on a graph is established at the intersection of the supply and demand curves.
Demand Curve Representation
- The demand curve illustrates the demand component of the equilibrium.
Definition of Equilibrium
- Equilibrium is achieved when supply and demand intersect, indicating a balance in quantities.
Impact of Price on Demand
- When prices fall, the quantity demanded increases, explaining why prices below equilibrium lead to excess demand.
Characteristics of Market Equilibrium
- During market equilibrium, supply and demand meet at a specific price and quantity, reflecting balance in the market.
Excess Demand Indicator
- A limited amount of goods available indicates that excess demand is occurring in the market.
Consequence of Supply and Demand Imbalance
- When the quantity supplied exceeds the quantity demanded at a certain price, it results in excess supply, indicating a surplus in the market.
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Description
Explore the concepts of supply, demand, and market equilibrium with these flashcards. Each card presents a question that helps reinforce your understanding of how prices are determined in the market. Ideal for students studying economics or related subjects.
