Market Equilibrium (and review)

At what point is equilibrium?

• $1

• $2

• $3

• $4

At what point is there a shortage?

• $2

• $3

• $4

• $5

At what point is there a surplus?

• $1

• $2

• $3

• $4

What does this represent?

• Increase in supply

• Decrease in supply

• Increase in demand

• Decrease in demand

What does this represent?

• Decrease in supply

• Increase in supply

• Decrease in demand

• Increase in demand

Which letter represents a shortage?

• A

• B

• C

• D

Which letter represents a surplus?

• A

• B

• C

• D

Shortages

• drive prices up

• drive prices down

• have no affect on price

Surpluses

• drive prices up

• drive prices down

• have no affect on price

The Clearance rack at any store represents

• a shortage

• a surplus