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Questions and Answers
What is the economic model of price determination in a market called?
What is the economic model of price determination in a market called?
What does the supply and demand model postulate will happen in a competitive market when the quantity demanded is greater than the quantity supplied?
What does the supply and demand model postulate will happen in a competitive market when the quantity demanded is greater than the quantity supplied?
In which type of market does the supply and demand model assume that price and quantity transacted reach an economic equilibrium?
In which type of market does the supply and demand model assume that price and quantity transacted reach an economic equilibrium?
Which branch of economics uses the supply and demand model as its theoretical basis?
Which branch of economics uses the supply and demand model as its theoretical basis?
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What does a supply schedule depict graphically?
What does a supply schedule depict graphically?
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Study Notes
Price Determination in a Market
- The economic model used to determine price in a market is called the supply and demand model.
Excess Demand
- When the quantity demanded is greater than the quantity supplied, a shortage occurs.
- The supply and demand model postulates that price will rise in this scenario.
Market Equilibrium
- The supply and demand model assumes that price and quantity transacted will reach an economic equilibrium in a perfectly competitive market.
Microeconomics
- The supply and demand model is the theoretical basis of microeconomics, a branch of economics that focuses on individual economic decision-making units.
Supply Schedule
- A supply schedule depicts graphically the relationship between price and quantity supplied.
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Description
Test your understanding of supply and demand in microeconomics with this quiz! Explore how price determination works in a competitive market and learn how the quantity demanded and supplied reach equilibrium. Challenge your knowledge of this fundamental economic model.
