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Lecture 23

ECON 1010 Lecture 23: Lecture 23

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ECON 1010
Laura K.Brown

OS98 1. Equilibrium as a situation in which various forces are in balance – and this also describes a markets equilibrium 2. At the equilibrium price, the quantity of the good that buyers are willing to buy exactly balances the quantity that sellers are willing to sell 3. The equilibrium price is sometimes called the market-clearing price because, at this price, everyone in the market has been satisfied – buyers can buy all they want to buy and sellers can sell all they want to sell 4. The actions of buyers and sellers naturally move markets toward the equilibrium of supply and demand 5. Surplus: a situation in which quantity supplied is greater than quantity demanded 6. Suppliers are unable to sell all they want at the going price 7. A surplus is sometimes called a situation of excess supply 8. They respond to the surplus by cutting their prices 9. Prices continue to fall until the market reaches the equilibrium 10.Shortage: a situation in which quantity demanded is greater than quantity supplied 11.Demanders are unable to buy all they want at the going price 12.A shortage is sometimes called a situation of excess demand 13.As the price rises, quantity d
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