Markets

Question 1

Define the term supply.

Answer 1

The amount of product or service that a business is willing and able to provide at a given price.

Question 2

Define the term demand.

Answer 2

The amount of product or service that customers are willing and able to buy at a given price.

Question 3

Explain what the market clearing price is.

Answer 3

The interaction of buyers and sellers creates an equilibrium price where demand and supply is equal.

Question 4

Explain what excess supply is.

Answer 4

When supply exceeds demand.

Question 5

Explain what excess demand is.

Answer 5

When demand exceeds supply.