market equilibrium

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  • Created by: lizaloo98
  • Created on: 07-04-16 16:42
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  • Market equilibrium and determination of equilibrium price and quantity
    • definition of market equilibrium
      • where demand and supply intersect
    • disequilibrium
      • any position in the market where supply and demand are not equal
    • excess demand
      • shortage
    • excess supply
      • surplus
    • changes in demand
      • an increase
        • in relation to supply an increase in demand will cause the new market equilibrium to have increase in quantity and an increase in price
      • a decrease
        • this would cause a decrease in quantity and a fall in price
    • changes in supply
      • an increase
        • an increase in relation to demand will cause the price to decrease and the quantity to increase
      • a decrease
        • this will cause the price to increase and the quantity to decrease
    • changes in both demand and supply
      • chnages in each may cause no change in either quantity or supply
    • depends upon points
      • the size of shift in either supply or demand
      • the elasticity of supply or demand
      • the consumers response
      • the producers response

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