Supply and Demand Flashcards
(12 cards)
What is competitive equilibrium?
when quantity supplied is equal to quantity
demanded
What does excess demand mean?
when consumers demand a greater quantity
of a good than producers supply
What does excess supply mean?
when producers supply a greater quantity of
good than consumers demand
What is bidding mechanism?
It is the process by buyers trying to change the price of a good in order to guarantee they are able to obtain it
they are
Statement:
Excess demand shrinks as price increases
Excess Supply (statement)
price will eventually decrease also, buyers
will come in when price decreases
What is surplus?
more supply than demand
When does the bidding mechanism take
place?
when there is either excess demand or excess supply
What is equilibrium price?
when supply and demand are the same
What is the outcome of the Supply and
Demand curves?
stable
What is equilibrium referring to in the
supply and demand graph?
no change
What is supply and demand?
the theory in which prices are established by
the equilibrium between the curves of demand an supply
