Ch. 3 (Part 3) Prices

Front

Equilibrium price is the price at which the quantity of a product demanded by consumers and the quantity supplied by producers

Back

are equal.

Front

On the market demand and supply graph, the vertical axis shows

Back

prices.

Front

On the demand and supply graph, the horizontal axis shows

Back

quantity.

Front

On the market demand and supply graph, the point of market equilibrium always happens

Back

where the demand and supply curves intersect.

Front

When there is a shortage, producers raise prices in an attempt to

Back

equalize the quantity supplied and demanded.

Front

Suppliers often reduce prices when they have a surplus of products to sell.

Back

have a surplus of products to sell.

Front

In the price system of a market economy, prices are determined by

Back

market forces.

Front

Higher prices generally

Back

motivate producers to enter a market.

Front

Lower prices generally

Back

motivate consumers to buy.

Front

The maximum amount that sellers may charge for a good or service is called a

Back

price ceiling.