Week 3-4

• Equillibrium is found through?

  Trial and error
• refers to an excess of goods or services that a company has produced or purchased but hasn't been able to sell or use

  Surplus
• It is a situation where the demand is lower than the supply

  Surplus
• It can be solved through lowering the price

  Surplus
• occurs when there's not enough of a product or service to meet the demand from customers. This can happen due to factors like high demand, production issues, or supply chain disruptions

  Shortage
• It is a situation where the demand is greater than the supply

  Shortage
• Shortage is caused by?

  Product is lower than normal prices

  Lack of resources

  Natural disasters
• Shortage can be fixed through?

  Raising prices

  Increase production
• It is an imposed maximum price on a product or service to prevent it from becoming too expensive for consumers, it can sometimes lead to shortage if the product in below equillibrium

  Price ceiling
• It is an imposed minimum price on a product or service to prevent it from becoming too cheap for producers.

  Price floors
• refers to how sensitive the quantity demanded or supplied of a good or service is to changes in price or other factors like income or the prices of related goods

  Elasticity
• A situation where the market looks for:

  -stable prices

  -The quantity supplied is equal to the quantity demanded
• The price that brings equilibrium to the market.

  -It is usually found through "trial and error".

  Equllibrium price
• Two artificial market conditions

  Price ceiling

  Price floors