Download Supply and Demand 5-3

Supply and Demand
5-3
1. What is Demand Schedule?
-How much
consumers are
willing to buy at
various prices
2. What is Supply Schedule?
-How much sellers are
willing to sell at
various prices
4. What is Equilibrium?
-Point of balance
between price and
quantity
5. What will buyers find on
shelves at equilibrium?
-There will be ample
supply on shelves
6. What will firms find at
equilibrium?
-There will be enough
buyers for their
goods
7. What is Disequilibrium?
-When quantity
supplied is not equal
to quantity
demanded
8. What is Excess Demand?
-Quantity demanded is
more than the
quantity supplied
10. What will happen to
customers at excess demand?
-They will have to wait
in long lines or not
get the product they
want
11. What should a business do at
excess demand?
-Increase the price
12. What is Excess Supply?
-Quantity supplied
exceeds the quantity
demanded
14. What causes excess supply?
-High prices or excess
or over production
15. What will customers do at
excess supply?
-Buy less or buy an
alternative
16. What is a Price Ceiling?
-Maximum price set by
law that sellers can
charge for a good or
service
17. Give an example and explain.
-Rent Control, can
only charge so
much
18. What problems do price
ceiling cause?
• -Reduces quantity
and quality

-Waiting lists,
discrimination, and
bribery
19. What are Price Floors?
-Minimum price set by
the government that
must be paid
20. Give an example.
-Minimum Wage
21. What happens if price floors
are set wrong?
-Decrease in
employment and
benefits
-Prices of products
increase sharply
22. How did the government try to work
price floors into agriculture?
-Minimum price set, but if it goes below then the
government creates demand by purchasing
excess crops
23. What does the government
do instead today?
-Provides emergency financial aid to farmers