Market Equlibrium Flashcards
(3 cards)
1
Q
What is a market?
A
A market is a place where buyers and sellers meet to exchange gods or services
2
Q
Price mechanism (invisible hand)
A
Allocate scarce resources efficiently
Ration scarce resources by encouraging/discouraging consumption
Signal excess demand/supply and need for more or less resources
Incentivise producers to increase or decrease output to in crease profit
3
Q
What does equilibrium ?
A
Where supply equals demand resources are being allocated efficiently.
