Lecture 7 & 8
Call Kai
Learn
Practice Test
Spaced Repetition
Match
Flashcards
Knowt Play1/6
Earn XP
Description and Tags
Name | Mastery | Learn | Test | Matching | Spaced | Call with Kai |
|---|
No analytics yet
Send a link to your students to track their progress
7 Terms
Equilibrium Price
The price at which demand and supply are in balance, that is the quantity offered for sale is equal to the amount that people wish to buy. This price is also known as the “market-clearing price.”
Excess Supply
When, at a given price, firms/sellers are willing to supply more of a good then consumers are willing to buy. [SURPLUS]
Excess Demand
When at a given price, firms/sellers are willing to supply more of a good then consumers are willing to buy. [SHORTAGE']
Price Ceiling
Maximum legal price.
Only makes sense if it is below the equilibrium price.
Price Floor
Minimum legal price.
Only makes sense if it is above the equilibrium price.
Price Discrimination
The practice of charging different customers different prices for the same service provided.
The elasticity of demand
The absolute value of the percentage change in quantity demanded divided by the percentage change in prices.
