Market Determination/Price Changes

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6 Terms

1
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Price Mechanism

An incentive for producers to respond to changes in market conditions

2
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Market Equillibrium

Situation in the market where demand and supply are equal

3
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Market Disequillibrium

Situation in market where demand and supply are not equal

4
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Surplus

When supply exceeds demand (above the equillibrium level)

5
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Shortage

Where demand exceeds the equillibrium level (Below the price equillibrium)

6
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Price Changes

A change in price due to a change in demand, supply or combination of both