chp 6 zupi reading notes (econ).docx - Section 2 1 When buyers and sellers agree is called market equilibrium Equilibrium price is when the buyers and

chp 6 zupi reading notes (econ).docx - Section 2 1 When...

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Section 2 1. When buyers and sellers agree is called market equilibrium. Equilibrium price is when the buyers and sellers agree on the price of a product and there is enough supply and demand for that certain product. Equilibrium quantity is when there is enough product for what the consumers want to buy. 2. In a competitive free market, the law of supply and the law of demand will together push the price of a good or service to a level where the quantity demanded and the quantity supplied are equal. 3. Section 3 The time it takes for producers to change prices to match consumer demands varies Section 5: Quantity Supplied Quantity Demanded Equilibrium point Price= too low Excess Demand Less profit for owners Shortag e Price= Too high Less Deman d Quantit y is Greater Surplu s or Exces s Suppl y
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1. Prices Convey Information to Consumers and Producers: To consumers, price signals the opportunity cost of a purchase, and producers use prices to appeal to the consumers they hope will buy their product.
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  • Fall '16
  • Craig Zupi
  • Supply And Demand, competitive free market, Prices Convey Information

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