Ch.6 - Equilibrium Price
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Price ceiling
A legally determine maximum price that sellers may receive
Price floor
A legally determine minimum price that sellers may receive
Surplus
A result of quantity supplied being greater than quantity demanded, usually because prices are too high
Equilibrium price
Price at which the quantity of a product demanded by consumers and the quantity supplied by producers are equal
What happens to price if demand increases or supply decreases?
Price decreases
What happens to price if demand decreases or supply increases?
Price increases
Shortage
The results of quantity demanded being greater than quantity supplied