Market Equilibrium

"holding all else equal, when the price of a good rises, suppliers increase their quantity supplied for that good"

• law of supply

• law of demand

• law of equilibrium

• opportunity cost

the price where the quantity supplied equals the quantity demanded is known as

• opportunity cost

• demand curve

• marginal analysis

• market equilibrium

When the quantity demanded is greater than the quantity supplied it is known as

• equilibrium

• a shortage

• a surplus

• an opportunity cost

Any price where quantity demanded is not equal to the quantity supplied is known as disequilibrium.

• true

• false

Which of the following is a way that a firm can eliminate a surplus?

• raise prices

• create a new product

• offer a sale on the item

When demand increases, the equilibrium price and quantity supplied will both

• increase

• decrease

• stay the same

Suppose that the market for coats is described as follows: What is the equilibrium price of coats?

• 120

• 100

• 80

• 60

Suppose the government sets a price ceiling of $80. How large will the shortage be?

• 5 million coats

• 4 million coats

• 3 million coats

• 2 million coats

What is the Equilibrium Price?

• 1
• 2
• 3
• 4

What is the Equilibrium Quantity?

• 50
• 60
• 70
• 80