Economics Notes
Market Equilibrium
Market Equilibrium is the specific point where the quantity of a product demanded by
buyers exactly equals the quantity supplied by sellers.
Its where the point meet and where its naturally balance without a shortage or surplus.
The equilibrium price is the price which the demands and price meet
Equilibrium quantity is where the equilibrium is bought and sold in equilibrium
Demand and Supply curve
The demand slops down because consumers buy more when price falls.
The supply curves slop upwards because producers supply more goods when the
consumers buy more
Shortage
Shortage happens when the demand is greater than the quantity supply
This happens when cost is to low, goods may run out and prices usually rise
Surplus
A surplus happens when quantity supply is much greater than the quantity demanded,
Rhis usually happens when the prices are too high and prices usually fall.
Price Elasticity Demand (PED)
Price Elasticity of Demand (PED) measures how much the quantity demanded of a
product changes when its price changes.
Formula for PED
PED= % change in quantity demanded/% change in price
Price of Elasticity Supply (PES)
Price Elasticity of Supply (PES) measures how much the quantity supplied of a product
changes when its price changes.
Formula for PES
Market Equilibrium
Market Equilibrium is the specific point where the quantity of a product demanded by
buyers exactly equals the quantity supplied by sellers.
Its where the point meet and where its naturally balance without a shortage or surplus.
The equilibrium price is the price which the demands and price meet
Equilibrium quantity is where the equilibrium is bought and sold in equilibrium
Demand and Supply curve
The demand slops down because consumers buy more when price falls.
The supply curves slop upwards because producers supply more goods when the
consumers buy more
Shortage
Shortage happens when the demand is greater than the quantity supply
This happens when cost is to low, goods may run out and prices usually rise
Surplus
A surplus happens when quantity supply is much greater than the quantity demanded,
Rhis usually happens when the prices are too high and prices usually fall.
Price Elasticity Demand (PED)
Price Elasticity of Demand (PED) measures how much the quantity demanded of a
product changes when its price changes.
Formula for PED
PED= % change in quantity demanded/% change in price
Price of Elasticity Supply (PES)
Price Elasticity of Supply (PES) measures how much the quantity supplied of a product
changes when its price changes.
Formula for PES
