when is a market in equilibrium
a market is in equilibrium when the quality supplied is equal to the quantity demanded.
in equilibrium every seller who wants to sell can find a buyer and every buyer can find a willing buyer seller
define equilibrium price and what is the resulting quantity?
equilibrium price is where the quantity supplied equals the quantity demanded. the resulting quantity is called the equilibrium quantity.
define market
a market is any setting that brings together potential buyers and sellers. we often refer to sellers as supplies and buyers as demanders.
provide an example of a market
when you by a cup of coffee, you’re a buyer (demander) in the coffee market. whenever you spend money buying something, there’s a good chance that you’re acting as a demander of consumer goods or services.
define and provide an example of a planned economy
A planned economy is an economic system where the government makes all the major decisions about production, distribution, and prices. The state determines what goods and services are produced, how much of each is made, and how they are distributed to citizens.
- soviet union and North Korea. If a government decides the country needs 1 million tons of steel this year, it tells the factories exactly how much to produce, what wages to pay, and what the price will be — that’s a planned economy.
define shortage
- price is below equilibrium level
- Q demanded exceeds Q supplied
- firms can increase Price
define surplus
price is above its equilibrium
- quantity demanded is less than quantity supplied
- to sell more, firms decrease Price
