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