Equilibrium, shortages, and surpluses
What causes shortages in the market? Shortages are caused by _______________ exceeding quantity supplied at a certain price.
quantity demanded
What causes surpluses in the market? Answer: Surpluses are caused by quantity supplied exceeding ___________ at a certain price.
quantity demanded
How does the equilibrium price and quantity change due to a decrease in demand? Answer: Due to a decrease in demand both equilibrium price and quantity ____________
decrease
How does the equilibrium price and quantity change due to a shift in the demand curve and supply curve that is occurring at the same time? Answer: If both demand and supply curves shift to the right, then equilibrium quantity __________ and equilibrium price may increase, decrease, or stay the same. If both demand and supply curves shift to the left, then equilibrium quantity decreases and equilibrium price may increase, decrease, or stay the same.
increases
How does the equilibrium price and quantity change due to an increase in demand? Answer: Due to an increase in demand both equilibrium price and quantity __________.
increases
How does the equilibrium price and quantity change due to an increase in supply? Answer: Due to an increase in supply equilibrium price decreases and equilibrium quantity ___________.
increases
How does the equilibrium price and quantity change due to a decrease in supply? Answer: Due to a decrease in supply equilibrium price ___________ and equilibrium quantity decreases. Due to a decrease in supply equilibrium price increases and equilibrium quantity ____________.
increases, decreases
How does the equilibrium price and quantity change due to a shift in the supply curve? Answer: Due to a shift in the supply curve equilibrium price and quantity move in __________ directions.
opposite
How are shortages eliminated? Answer: Shortages are eliminated by allowing the __________ to rise to the equilibrium.
price
How are surpluses eliminated? Answer: Surpluses are eliminated by allowing the ________ to fall to the equilibrium.
price
When is a market at an equilibrium? Answer: A market is at an equilibrium when quantity demanded equals ___________ supplied.
quantity
How does the equilibrium price and quantity change due to a shift in the demand curve? Answer: Due to a shift in the demand curve equilibrium price and quantity move in the ________ direction.
same
