Chapter 6 - Price: Supply and Demand Together Flashcards Preview

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Flashcards in Chapter 6 - Price: Supply and Demand Together Deck (6)
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1
Q

Surplus

A

The condition in which the Quantity Supplied of a good is greater than the Quantity Demanded. Surpluses occur only at prices ABOVE Equilibrium Price

2
Q

Shortage

A

The condition in which the Quantity Demanded of a good is greater than the Quantity Demanded. Shortages occur only at prices BELOW equilibrium price

3
Q

Equilibrium

A

The point at which the quantity of a good that buyers are willing and able to pay is equal to the quantity that sellers are willing and able to produce and offer for sale. Supply and Demand Curve intersect at this point.

4
Q

Inventory

A

The stock of goods that a business or store has on hand.

5
Q

Price Ceiling

A

A legislated price—set lower than the equilibrium price—above which buyers and sellers cannot legally buy and sell a good.

6
Q

Price Floor

A

A legislated price—set higher than the equilibrium price—below which buyers and sellers cannot legally buy and sell a good.