Exam 4: The Market Forces of Supply and Demand: Part B

Sellers as a group determine the demand for a product,and buyers as a group determine the supply of a product.

A shortage will occur at any price below equilibrium price and a surplus will occur at any price above equilibrium price.

In a market,the price of any good adjusts until quantity demanded equals quantity supplied.

When the market price is above the equilibrium price,the quantity of the good demanded exceeds the quantity supplied.

When the market price is below the equilibrium price,the quantity of the good demanded exceeds the quantity supplied.

When quantity supplied exceeds quantity demanded at the current market price,the market has a surplus,and market price will likely rise in the future to eliminate the surplus.

If a higher price means a greater quantity supplied,then the supply curve slopes upward.

A market's equilibrium is the point at which the supply and demand curves intersect.