Key Terms for Elasticity Equilibrium Price - The price of a good or service at which quantity supplied is equal to quantity demanded. Also called the market-clearing price. Equilibrium Quantity - Amount of goods or services sold at the equilibrium price. Because supply is equal to demand at this point, there is no surplus or shortage. Goods and Services - Products or work that are bought and sold. In a market economy, competition among buyers and sellers sets the market equilibrium, determining the price and the quantity sold. Inelastic - Describes a supply or demand curve which is relatively unresponsive to changes in price. That is, the quantity supplied or demanded does not change easily when the price changes. A curve with an elasticity less than 1 is inelastic. Long Run - The distant future, for which buyers and sellers make "permanent" decisions, such as exiting the market or permanently decreasing consumption.
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