Combining Supply and Demand Finding Equilibrium
Balancing a Market Equilibrium: the point at which quantity demanded and quantity supplied are equal. Equilibrium: the point at which quantity demanded and quantity supplied are equal. Combined Supply and Demand schedules allow us to see where quantity supplied equals the quantity demanded. Combined Supply and Demand schedules allow us to see where quantity supplied equals the quantity demanded. Equilibrium can be seen on a graph when we plot Supply and Demand and look at where they meet. Equilibrium can be seen on a graph when we plot Supply and Demand and look at where they meet.
Disequilibrium Occurs when quantity supplied is not equal to quantity demanded. Occurs when quantity supplied is not equal to quantity demanded. Excess demand: occurs when quantity demanded is more than quantity supplied. Excess demand: occurs when quantity demanded is more than quantity supplied. Excess supply: occurs when quantity supplied is more than quantity demanded. Excess supply: occurs when quantity supplied is more than quantity demanded.
The Government.. Again! Price Ceiling: a maximum price that can be legally charged for a good. Price Ceiling: a maximum price that can be legally charged for a good. Rent Control: created to prevent inflation in the 1940’s and still can be seen today. Section 8 Housing. Rent Control: created to prevent inflation in the 1940’s and still can be seen today. Section 8 Housing. A price ceiling increases the quantity demanded but decreases the quantity supplied. Since rents are not allowed to rise, this excess demand will last as long as the price ceiling holds. A price ceiling increases the quantity demanded but decreases the quantity supplied. Since rents are not allowed to rise, this excess demand will last as long as the price ceiling holds.
Price Floor Price Floor: a minimum price that can be charged for a good or service. Price Floor: a minimum price that can be charged for a good or service. Minimum wage: a minimum price that an employer can pay a worker for an hour of labor; set by government. Minimum wage: a minimum price that an employer can pay a worker for an hour of labor; set by government. A person working full time and getting paid minimum wage is making less than the federal government says is necessary to support a couple and one child. A person working full time and getting paid minimum wage is making less than the federal government says is necessary to support a couple and one child. If minimum wage is set above equilibrium the result is a decrease in employment. There are more people who want jobs and not enough jobs out there. If minimum wage is set above equilibrium the result is a decrease in employment. There are more people who want jobs and not enough jobs out there.