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Test Study Guide Exam # 2

Test Study Guide Exam # 2 - Market Ceteris Paribus Demand...

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rice Increases the Quantity Decreases, and vice-versa e Does Not cause the Demand curve to Shift (Determinants Do) n which the quantity Demanded is Greater than the quantity Supplied (d>s) which the quantity Supplied is Greater than the quantity Demanded (s>d) d producer meet) but Pays at Equilibrium. Therefore, Everything Above Equilibrium is Surplus, because the consumer Came Out Better tha amount close to Equilibrium Min. Price Max Price In favor for the Producer. However, because the Price will Not Come Down consumers chose Not to Buy More and a Surplus Occurs becau ose Not to Produce More. As a result, there is a Shortage of the Good and because Prices Cannot go Up the Market never returns to Equilib e there is a Ceiling in place, Producers are Not going to Produce More Quantity, therefore, the Quantity that the Consumer Would have Rece . As a result, the Consumer Purchases Less because he is Spending More on the Tax, and the Producer is Earning Less because he is also Pa Market Any mechanism that Brings Buyers and Sellers Together Ceteris Paribus “All else equals” relationship between 2 Variables ( Price & Quantity ) must be Held constant Demand and Supply
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