Equilibrium Econ
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7 Terms
Define equilibrium in a market.
The point where quantity supplied equals quantity demanded
What is an equilibrium price?
The price at which the market is in balance — no shortage or surplus.
Define shortage and surplus.
Shortage: Quantity demanded > Quantity supplied; pushes price upward. Surplus: Quantity supplied > Quantity demanded; pushes price downward.
Effect of an increase in demand on equilibrium.
Increases both equilibrium price and quantity.
Effect of a decrease in demand on equilibrium.
Decreases both equilibrium price and quantity.
Effect of an increase in supply on equilibrium.
Decreases equilibrium price but increases equilibrium quantity.
Effect of a decrease in supply on equilibrium.
Increases equilibrium price but decreases equilibrium quantity.
Note 
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