Micro 3.6 0.0 / 5 ? EconomicsThe Determination of Equilibrium Market PricesA2/A-levelAQA Created by: neve.whinnCreated on: 13-03-20 09:43 What is the equilibrium market price and quantity determined by? The interaction of the market demand and supply curve 1 of 10 When is the market in equilibrium? When the quantity demanded equals the quantity supplied. 2 of 10 When does market disequilibrium occur? When the quantity demanded does not equal the quantity supplied. 3 of 10 When will there be excess supply? When the price is above the market equilibrium price. 4 of 10 How does excess supply work? The relatively high price encourages a greater quantity to be supplied. 5 of 10 When will there be excess demand? When the price is below the market equilibrium price. 6 of 10 How does excess demand work? The low price leads to less incentive for firms to supply the product, leading to a lower quantity supplied. 7 of 10 How is excess supply resolved? Firms will be forced to reduce their prices, leading to a contraction along the supply curve and an extension along the demand curve. 8 of 10 How is excess demand resolved? Firms are able to increase their prices, leading to an extension along the supply curve and a contraction along the demand curve. 9 of 10 What can a change in the market equilibrium price be caused by? A shift of the demand curve or a shift of the supply curve, resulting from a change in the conditions of demand or supply. 10 of 10
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