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Economics 3.2-5 thru 3.4.1 > Supply and Demand > Flashcards

Flashcards in Supply and Demand Deck (12)
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1
Q

What is competitive equilibrium?

A

when quantity supplied is equal to quantity

demanded

2
Q

What does excess demand mean?

A

when consumers demand a greater quantity

of a good than producers supply

3
Q

What does excess supply mean?

A

when producers supply a greater quantity of

good than consumers demand

4
Q

What is bidding mechanism?

A

It is the process by buyers trying to change the price of a good in order to guarantee they are able to obtain it
they are

5
Q

Statement:

A

Excess demand shrinks as price increases

6
Q

Excess Supply (statement)

A

price will eventually decrease also, buyers

will come in when price decreases

7
Q

What is surplus?

A

more supply than demand

8
Q

When does the bidding mechanism take

place?

A

when there is either excess demand or excess supply

9
Q

What is equilibrium price?

A

when supply and demand are the same

10
Q

What is the outcome of the Supply and

Demand curves?

A

stable

11
Q

What is equilibrium referring to in the

supply and demand graph?

A

no change

12
Q

What is supply and demand?

A

the theory in which prices are established by

the equilibrium between the curves of demand an supply