Chapter four- How competitive market functions

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  • Created by: Martine
  • Created on: 31-10-14 20:33
Equilibrium
The price at which demand is equal to supply and there is no tendancy for change. It is the point where the demand curve and supply curve meet on the graph.
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Disequilibrium
A situation within the market where supply does not equal demand
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Excess Supply
When supply at a particular price is greater than demand; this should signal to producers to lower prices.
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Market-clearing price
The price at which all goods that are supplied will be demanded
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Excess Demand
When demand is greater than supply at a given price
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Maximum price
A price ceiling above which the price of a good or service is not allowed to increase
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Minimum price
A price floor which the price for a good or service is not allowed to decrease
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Other cards in this set

Card 2

Front

A situation within the market where supply does not equal demand

Back

Disequilibrium

Card 3

Front

When supply at a particular price is greater than demand; this should signal to producers to lower prices.

Back

Preview of the back of card 3

Card 4

Front

The price at which all goods that are supplied will be demanded

Back

Preview of the back of card 4

Card 5

Front

When demand is greater than supply at a given price

Back

Preview of the back of card 5
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