Glossary
Learning Objectives
After completing this lesson, you will be able to
- explain that the interaction of supply and demand determines price
- define market equilibrium
- compare a market in equilibrium with a market in disequilibrium
- describe what happens to price when there is a surplus or shortage in the market
- demonstrate how changes in the determinants of supply and demand affect the equilibrium price and quantity of a good or service
- explain that a market reacts to changes in supply and demand by moving to a new equilibrium
- use graphs to illustrate shifts in supply and demand and changes in equilibrium price and quantity