Supply and demand
Equilibrium it is a past at which the supply and the demand curve intersect
Excess demand occur when QD > QS greater than quantity supply
Excess demand result in a shortage is where consumers can't get the quanity of the items that they desire
Price ceiling create a shortage when the goverment sets a legal limit on how high the price of a product can be in order for price willing to be effective it must be below equlibrum
Excess supply QS>QD this is QS is greater than QD
Surplus producers have inventory, where they can't get rid of price floor
Price floor lowest legal price can be sold at used by the government to prevent prices from becoming to low
Example: minimum wage
No comments:
Post a Comment