Equilibrium
The price where quantity demanded equals quantity supplied.
What is Equilibrium
Demand increases; supply stays the same. What happens to equilibrium price?
What is increase.
A market with only one seller.
What is a monopoly.
A new influencer trend makes everyone less interested in Lebubus and more interested in Mirumi Charm Robots.
What is tastes/preferences.
he price of hamburgers rises. Consumers buy more hot dogs.
What is demand for hot dogs shifts right? (substitutes)
If the market price is above equilibrium, you typically get this.
What is a surplus.
Supply increases; demand stays the same. What happens to equilibrium price?
What is decrease.
A market with many sellers and similar but not identical products (branding).
What is monopolistic competition
The price of coffee beans increases, making it more expensive to produce coffee drinks.
What is input costs
A tax is placed on sugary drinks, increasing the cost for producers.
What is supply shifts left?
If the market price is below equilibrium, you typically get this
What is a shortage
Demand decreases; supply stays the same. What happens to equilibrium quantity?
What is decreases
A market with a few dominant sellers that might communicate or collude.
What is an oligopoly
A city’s population grows rapidly, increasing the number of potential buyers for apartments.
What is number of buyers (consumers)/population.
Household incomes rise and people buy more restaurant meals.
What is demand shifts right?
In a shortage, prices tend to move in this direction over time.
What is up (increase)
Supply decreases; demand stays the same. What happens to equilibrium price?
What is increases
A market with many sellers and identical products and firms cannot set the price.
What is perfect competition
A major improvement in farming equipment makes it faster and cheaper to grow wheat.
What is technology
A drought destroys part of the orange crop.
What is supply shifts left?
In a surplus, prices tend to move in this direction over time.
What is down (decrease).
Both demand and supply increase. What happens to equilibrium quantity most likely?
What is increases
True/False: In a monopoly, firms are price takers.
What is false - firms have a lot of control over prices so they are price makers.
People hear rumors that a gaming console will be hard to find next month. They rush to buy now.
What is expectations.
The price of peanut butter rises. People buy fewer jelly jars.
What is demand for jelly shifts left? (complements)