2.4 - Price

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    rhys

    Cards (4)

    • Excess demand occurs when the price is set to a point where the demand for a product exceeds the available supply of a product
    • Excess Supply occurs when the price is set to a point where the supply for a product exceeds the current demand of the product.
    • Equilibrium occurs when the price is set to a point where the demand and supply are at the same level.
    • 5 Characteristics of market forces:
      • Naturally moves market towards equilibrium
      • Signals sent
      • Incentive
      • Allocating Scarce Resources
      • Rationing excess
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