Download Module 7 – Supply and Demand: Equilibrium 1. Define equilibrium

Goldwasser
AP Microeconomics
Name _______________
Module 7 – Supply and Demand: Equilibrium
1. Define equilibrium.
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2. What is the easiest way to find the equilibrium price and quantity?
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3. Why do all sales and purchases in a competitive market take place at the same
price?
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4. Why does the market price fall if it is above the equilibrium price?
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5. Why does the market price rise if it is below the equilibrium price?
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6. Explain the difference between a surplus and shortage.
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7. What happens to price and quantity when there an increase in demand? A
decrease?
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8. What happens to price and quantity when there an increase in supply? A
decrease?
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9. What happens when supply and demand both increase? Both decrease?
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10. What happened when supply increases and demand decreases? When supply
decreases and demand increases?
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