ECON Module 4
Shortages and surpluses are represented by the:
horizontal distance between the quantity demanded and the quantity supplied
Increased scarcity and inefficiency will result when:
the market is in disequilibrium
A shortage occurs when:
the quantity of output demanded is greater than the quantity of output supplied at the current market place
A surplus occurs when:
the quantity of output supplied is greater than the quantity of output demanded at the current market price
When the quantity supplied of a good, service, or resource equals the quantity demanded, this quantity traded is known as the:
Equilibrium quantity
For a market to reach equilibrium,
-Consumers need information about different suppliers' prices -Firms must be able to change the prices of their goods -Firms must be able to monitor inventories
Characteristics of Equilibrium Include:
-Qs=Qd -Qs=Qd
Quantity of output supplied is greater than the quantity of output demanded at the current market price:
Surplus
In equilibrium:
The supply and the demand are equal