January 20
- Equilibrium- is the point at which the supply curve and the demand curve intersect
- Excess Demand- it occurs when quantity demanded is greater than quantity supplied
- Results in a shortage
- Shortage- This is where consumers can't get enough of the quantities they desire
- Price Ceiling- it occurs when the government puts a legal limit on how high the price of a product can be.
- creates a shortage
- is always below the equilibrium
- Ex. The government sets a price ceiling for a flu shot
- Ex. Rent control
- Excess Supply- It occurs when quantity supplied is greater than quantity demanded
- Price floor- It is the lowest legal price a commendity can be sold at
- They are used by the government to prevent prices from becoming too low
- Ex. Minimum wage
Although your notes are well-organized it would be helpful if you had attached some sort of visual like the one given in class. This way others are able to remember how to label supply and demand graphs as well as understand where the price ceiling and price floor are located.
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