Market Equlibrium

Question 1

Market Equilibrium

Answer 1

The state of equality between demand and supply, there is no excess demand or supply

Question 2

Market Disequilibrium

Answer 2

Prices where demand and supply are out of balance

Question 3

What does an Outward shift of market demand lead to?

Answer 3

Leads to a rise in equilibrium price and an expansion of market supply

Question 4

Reason for an upward sloping supply curve

Answer 4

Price and supply have a positive relationship, because firms are profit maximisers and they will supply more as it becomes more profitable