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MARKET EQUILIBRIUM

Price. Price. MARKET EQUILIBRIUM. SUPPLY. DEMAND. Quantity. Quantity. Market Equilibrium is when the quantity demanded and the quantity supplied at a particular price are EQUAL. Equilibrium Price is the price at which the quantity demanded and the quantity supplied are equal.

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MARKET EQUILIBRIUM

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  1. Price Price MARKET EQUILIBRIUM SUPPLY DEMAND Quantity Quantity

  2. Market Equilibrium is when the quantity demanded and the quantity supplied at a particular price are EQUAL. • Equilibrium Price is the price at which the quantity demanded andthe quantity supplied are equal. Market Equilibrium

  3. Price $6 SUPPLY $5 Market Equilibrium $4 $3 DEMAND $2 $1 0 10 40 50 20 30 60 Quantity

  4. A SURPLUS is when the quantity supplied is greater than the quantity demanded. • A SHORTAGE is the when the result of quantity demanded is greater than quantity supplied. • If neither a shortage or surplus exists, then the market is at equilibrium! Market Equilibrium

  5. Price SUPPLY Surplus DEMAND Quantity

  6. Price Shortage SUPPLY DEMAND Quantity

  7. Market Research for Demand is important as producers try to maximize their sales. • With a market demand schedule a producer can tell how much demand a product will have at different prices. Market Research

  8. Market Research for Supply is important as producers know how much of a product to supply. • Producers use a market supply schedule to determine how much quantity of the product that producers will sell at a given price. Market Research

  9. Market Disequilibrium is when quantity demanded and quantity supplied are NOT in balance. • Equilibrium again is when quantity demanded and quantity supplied ARE in balance. Disequilibrium

  10. Price • When demand decreases, equilibrium price goes_____________ • When demand increases, equilibrium price goes_____________ $6 SUPPLY $5 Demand & Disequilibrium $4 $3 DEMAND $2 $1 0 10 40 50 20 30 60 Quantity

  11. Price • When supply decreases, equilibrium price goes_____________ • When supply increases, equilibrium price goes_______________ $6 SUPPLY $5 Supply & Disequilibrium $4 $3 DEMAND $2 $1 0 10 40 50 20 30 60 Quantity

  12. The time period between the change in demand and change in equilibrium price is known as DISEQUILIBRIUM Disequilibrium

  13. If demand increases OR Supply decreases THEN If demand decreases OR Supply increases THEN Recap PRICEEQUILIBRIUMFALLS PRICEEQUILIBRIUMRISES

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